Posts by: WST Expert 1
Re: Insurance financial modeling
[quote="Theferrariboy":t1efjuct]During the course on CapEx depreciation, the video got stuck somehow. I couldn't watch it on my computer. Could you therefore please post the formulas for: - CapEx depreciation (CF rows 41-46) - PPE & Intangibles (BS row 23) - Depreciation & Amortiz... Read More
[quote="Theferrariboy":t1efjuct]During the course on CapEx depreciation, the video got stuck somehow. I couldn't watch it on my computer. Could you therefore please post the formulas for: - CapEx depreciation (CF rows 41-46) - PPE & Intangibles (BS row 23) - Depreciation & Amortiz... Read More
RE: Footing my accretion/dilution model with reported numbers
Remember, an accretion/dilution model is a back-of-the-envelope analysis that encapsulates the *major* components and drivers of value in a deal. Therefore, it would be nearly impossible to replicate a real deal's numbers since the bankers would be building a super complex, fully integrated merger m... Read More
Remember, an accretion/dilution model is a back-of-the-envelope analysis that encapsulates the *major* components and drivers of value in a deal. Therefore, it would be nearly impossible to replicate a real deal's numbers since the bankers would be building a super complex, fully integrated merger m... Read More
RE: Quick & Dirty Basic LBO Model: text book
Generally, we shy away from textbooks because they tend to be academic in nature and requires you to read 400 pages of text to get to the 20 pages that one really cares about. If there is anything in particular you are looking for, let us konw. Else, there's always a search on amazon. Our book (not ... Read More
Generally, we shy away from textbooks because they tend to be academic in nature and requires you to read 400 pages of text to get to the 20 pages that one really cares about. If there is anything in particular you are looking for, let us konw. Else, there's always a search on amazon. Our book (not ... Read More
Re: Short cut for increase/decrease decimal point
Please download our Excel shortcuts from our FREE EXHIBITS at www.wallst-training.com. At the bottom right of the shortcut sheet, there are instructions on how to insert into the Format menu. We've reproduced the instr... Read More
Please download our Excel shortcuts from our FREE EXHIBITS at www.wallst-training.com. At the bottom right of the shortcut sheet, there are instructions on how to insert into the Format menu. We've reproduced the instr... Read More
Re: How would you go about valuing a company?
Thank you for your inquiry. However, this is covered in our Corporate Valuation class and it wouldn't be practical to explain each approach in this venue. Please go to: www.wstselfstudy.com/programs and purchase ... Read More
Thank you for your inquiry. However, this is covered in our Corporate Valuation class and it wouldn't be practical to explain each approach in this venue. Please go to: www.wstselfstudy.com/programs and purchase ... Read More
RE: Circular reference problem in my model due to interest-HELP!
In general, circular references should be avoided whenever possible; however, you will legitly need a circ when calculating interest expense off average balance. (see our website and click on FREE RESOURCES for an exhibit on circular reference and Excel iterations). The workaround is to calculate of... Read More
In general, circular references should be avoided whenever possible; however, you will legitly need a circ when calculating interest expense off average balance. (see our website and click on FREE RESOURCES for an exhibit on circular reference and Excel iterations). The workaround is to calculate of... Read More
Re: Complex LBO - tender costs
Since we did not take the actual future cash flows of the bond, we estimated it in the model by assuming (somewhat random) %age as you noted. If you did have the actual future cash flows of the bonds (notably, future interest payments), you would take the NPV of such future cash flows + accrued inte... Read More
Since we did not take the actual future cash flows of the bond, we estimated it in the model by assuming (somewhat random) %age as you noted. If you did have the actual future cash flows of the bonds (notably, future interest payments), you would take the NPV of such future cash flows + accrued inte... Read More
Re: dollar sign to "R"
You're quite welcome. Glad we could be of assistance!
You're quite welcome. Glad we could be of assistance!
Re: Distressed Debt Model
Our distressed model is not meant for evaluating HY bonds. We would suggest our regular "Core Model" which maps out cash flows and credit ratios to evaluate non-distressed high yield. Our distressed model is essentially for an imminent bankruptcy (or in bankruptcy). In addition, our Covena... Read More
Our distressed model is not meant for evaluating HY bonds. We would suggest our regular "Core Model" which maps out cash flows and credit ratios to evaluate non-distressed high yield. Our distressed model is essentially for an imminent bankruptcy (or in bankruptcy). In addition, our Covena... Read More
The Balance Sheet must always balance! Formula Asset = Liabilities + Equity, so think of it this way, you have a house, that house is an asset worth $100,000, if you get a mortgage of $80,000 (the debt), the remaining $20,000 has to go where? Well that belongs to you, which is in the form of equity.... The Balance Sheet must always balance! Formula Asset = Liabilities + Equity, so think of it this way, you have a house, that house is an asset worth $100,000, if you get a mortgage of $80,000 (the debt), the remaining $20,000 has to go where? Well that belongs to you, which is in the form of equity. So when theory (Assets (100k) = Liabilities (80k) + Equity (20k) becomes reality is when you sell that house, you will pocket the 20k. Let's say now some time went by, and you paid off 10k on the mortgage. Well let's demonstrate what happens. The asset is still worth 100k, the liability (mortgage) is 70k, now where does that remaining 30k go? Well that's your equity. You see why it must "always" balance.
Now, in the context of the financial model, the revolver balances the model - think of it another way: say you make $100 of income this month. But you spent $120. The $20 difference is charged on your credit card (revolver). Next month, you make another $100, but you only spent $92. You have $8 of excess cash that 2nd month, which you will use to pay off your revolver of $20, leaving a net balance on revolver of $12.
A third way to explain it: As long as every item that changes on the IS and BS is reflected on the CF, you should balance. Why? Back to old school debits and credits and double-entry accounting. There's ALWAYS two entries for every transaction. Now, every item on the IS is reflected via Net Income and Retained Earnings via S/H Equity and Cash Flow Statement. So that takes care of IS integration. Go line by line thru the rest of the BS and you'll see all the working capital items reflected in CFO. Stuff like PPE is connected to CapEx (cash down), etc. Then, the Equity changes are reflected in CFF, leaving debt and revolver to cap off (see above paragraph).
Re: your iterations question - at some point the numbers don't change b/c Excel only calculates 15 decimal places. If Excel were to suddenly chanage that to 30 decimal places, then it would keep going and the numbers would change again. However, that one-gazillionth of a decimal difference has no material impact on our model. We usually observe no more than 30 or so iterations to balance, so a few hundred would be quite a bit actually. Read More