Posts by: WST Expert 1
Re: Impact of gain from sale of asset on financial statements
For Cash Gain: CFO: correct, just bring in NI CFI: option (b), except the $8.5K is not called "gain", just "Disposal (or Sale) of Assets" and the $8.5K would correspond to the Net Book Value of the asset which mirrors the reduction in PPE on the BS of $8.5K Non-Cash Gain: CFO: correct, bring i... Read More
For Cash Gain: CFO: correct, just bring in NI CFI: option (b), except the $8.5K is not called "gain", just "Disposal (or Sale) of Assets" and the $8.5K would correspond to the Net Book Value of the asset which mirrors the reduction in PPE on the BS of $8.5K Non-Cash Gain: CFO: correct, bring i... Read More
Re: Impact of gain from sale of asset on financial statements
Yes, those entries sound correct.
One nuance:
The gain would not show up on CFI. Thus, CFI would be +$8.5K. The CFO entry of "less gain" of $1.5K would NOT be made.
The CFO entry is only made if it is a NON-CASH gain.
Yes, those entries sound correct.
One nuance:
The gain would not show up on CFI. Thus, CFI would be +$8.5K. The CFO entry of "less gain" of $1.5K would NOT be made.
The CFO entry is only made if it is a NON-CASH gain.
Re: Prepaid Rent & Selling of Assets
Yes, those entries sound correct.
One nuance:
The gain would not show up on CFI. Thus, CFI would be +$8.5K. The CFO entry of "less gain" of $1.5K would NOT be made.
The CFO entry is only made if it is a NON-CASH gain.
Yes, those entries sound correct.
One nuance:
The gain would not show up on CFI. Thus, CFI would be +$8.5K. The CFO entry of "less gain" of $1.5K would NOT be made.
The CFO entry is only made if it is a NON-CASH gain.
Re: Projection of FX translation
We recommend applying any FX impacts after the core projections have been finalized. It is imperative to make sure "constant growth" growth rates are utilized for a fair and true comparison of YoY performance. This is covered in our Segment Build-up Course in which we review this very topic.
We recommend applying any FX impacts after the core projections have been finalized. It is imperative to make sure "constant growth" growth rates are utilized for a fair and true comparison of YoY performance. This is covered in our Segment Build-up Course in which we review this very topic.
Re: Purpose of Column O in value tab
Please continue to watch the videos to understand the logic. In short, we are going to sensitize the figures in Column N and ask the question of "What happens when the valuation is wrong?" There will be stakeholders who get greater than 100% recovery - we're teaching you how to evaluate capital stru... Read More
Please continue to watch the videos to understand the logic. In short, we are going to sensitize the figures in Column N and ask the question of "What happens when the valuation is wrong?" There will be stakeholders who get greater than 100% recovery - we're teaching you how to evaluate capital stru... Read More
Re: Seasonal Working Capital
If I'm the seller and you want a greater working capital requirement (i.e. deduction to purchase price), then I would respond and say, ok I spent all that money and I don't get the benefit of that once you presumably sell the inventory during Q4. If I'm the acquiror, I'd make the opposite case s... Read More
If I'm the seller and you want a greater working capital requirement (i.e. deduction to purchase price), then I would respond and say, ok I spent all that money and I don't get the benefit of that once you presumably sell the inventory during Q4. If I'm the acquiror, I'd make the opposite case s... Read More
Re: Hedging Instruments and TEV
Off the top of our head, we cannot think of a ready example of such a case. However, if one wanted to treat the GAIN of hedging instruments as cash then it's possible. We'd need a bit more context. If the hedging instruments is a recurring part of operations then we wouldn't treat it as part of capi... Read More
Off the top of our head, we cannot think of a ready example of such a case. However, if one wanted to treat the GAIN of hedging instruments as cash then it's possible. We'd need a bit more context. If the hedging instruments is a recurring part of operations then we wouldn't treat it as part of capi... Read More
Re: Accounting question on
Hello, apologies for the delay in response. We moved your query to the correct topic as we didn't previously catch the question due to category. Your method one is correct, but it's only part one of the required calculation. Assuming that the new investment size was $15.5MM (and that the $15.5MM... Read More
Hello, apologies for the delay in response. We moved your query to the correct topic as we didn't previously catch the question due to category. Your method one is correct, but it's only part one of the required calculation. Assuming that the new investment size was $15.5MM (and that the $15.5MM... Read More
Re: Question on interest income impact on FCFE and valuation
Hi, Generally speaking we strongly advocate against the use of FCFE. Please just don't do it. There are few exceptions to this rule and they are industry specific, such as project finance and real estate. If you are indeed looking at project finance or real estate, your questions wouldn't really a... Read More
Hi, Generally speaking we strongly advocate against the use of FCFE. Please just don't do it. There are few exceptions to this rule and they are industry specific, such as project finance and real estate. If you are indeed looking at project finance or real estate, your questions wouldn't really a... Read More
The final numbers that would be reflected on the IS would also be NET of the FX impact. As such, it would flow through the BS and CF as normal, meaning no extra special adjustment needed. This assumes the company converts to reporting currency. The actual steps in the model would be done in the Segm... The final numbers that would be reflected on the IS would also be NET of the FX impact. As such, it would flow through the BS and CF as normal, meaning no extra special adjustment needed. This assumes the company converts to reporting currency. The actual steps in the model would be done in the Segment build-up portion which then flows through the IS.
If WMT sells a pen for EUR 1 in EuroLand and the EUR/USD rate is 1:1, then that is reported as USD 1. Next year, they sell the same pen for EUR1 but the FX rate changes to EUR/USD 2:1 then WMT simply reports only USD $0.50. That is already reflected on the IS correctly as USD $0.50 of revenue. Read More