Posts by: WST Expert 1
Re: Beginning vs. Average Balance, and Diluted Shares Outstanding
1) To replicate the real world, average balance is the best practice. However, in cases where the capital structure (specifically, the level of debt) is really not changing period to period, beginning balance is also more than acceptable because the discrepancies are immaterial. 2) Please refer t... Read More
1) To replicate the real world, average balance is the best practice. However, in cases where the capital structure (specifically, the level of debt) is really not changing period to period, beginning balance is also more than acceptable because the discrepancies are immaterial. 2) Please refer t... Read More
Re: Free Cash Flow to Equity
In the context of real estate financing, FCFE would only be calculated for IRR purposes. The debt financing is simply part of the equity/debt mix for the required CapEx at the inception of the project. In this case, the FCFE would need to incorporate the interest payments and any principal reduction... Read More
In the context of real estate financing, FCFE would only be calculated for IRR purposes. The debt financing is simply part of the equity/debt mix for the required CapEx at the inception of the project. In this case, the FCFE would need to incorporate the interest payments and any principal reduction... Read More
Re: Convertible Bonds
The classification of the convert would only have implications on debt to cap and related ratios. Generally speaking, if the accountants/auditors have blessed the 80/20 split on the BS, then that is the way to go. For building the debt sweep, MOST of the time, there is NO cash flow sweep required on... Read More
The classification of the convert would only have implications on debt to cap and related ratios. Generally speaking, if the accountants/auditors have blessed the 80/20 split on the BS, then that is the way to go. For building the debt sweep, MOST of the time, there is NO cash flow sweep required on... Read More
Re: Free Cash Flow to Equity
If you are using FCFE then, yes, an increase in debt would increase FCFE. Do note that we HIGHLY discourage the use of FCFE for DCF purposes unless it is in specific circumstances such as certain types of real estate projects and infrastructure/project finance modeling.
If you are using FCFE then, yes, an increase in debt would increase FCFE. Do note that we HIGHLY discourage the use of FCFE for DCF purposes unless it is in specific circumstances such as certain types of real estate projects and infrastructure/project finance modeling.
Re: WLSRegression using Excel VBA
Sure thing: Function Diagonal(W) As Variant Dim n, i, j, k As Integer Dim temp As Variant n = W.Count ReDim temp(1 To n, 1 To n) For i = 1 To n For j = 1 To n If j = i Then temp(i, j) = W(i) Else temp(i, j) = 0 Next j Next i ... Read More
Sure thing: Function Diagonal(W) As Variant Dim n, i, j, k As Integer Dim temp As Variant n = W.Count ReDim temp(1 To n, 1 To n) For i = 1 To n For j = 1 To n If j = i Then temp(i, j) = W(i) Else temp(i, j) = 0 Next j Next i ... Read More
Re: WLSRegression using Excel VBA
Right now we are getting all 0s (but no #VALUE) with the OLSRegression function when feeding it two parameters: 1. one column of Implied Vol numbers (I2:I17 in our case) 2. three adjacent columns: one full of 1s, one with the Strike numbers, and one with the Maturity numbers (F2:H17 in our case) ... Read More
Right now we are getting all 0s (but no #VALUE) with the OLSRegression function when feeding it two parameters: 1. one column of Implied Vol numbers (I2:I17 in our case) 2. three adjacent columns: one full of 1s, one with the Strike numbers, and one with the Maturity numbers (F2:H17 in our case) ... Read More
Re: WLSRegression using Excel VBA
It looks like you can get rid of the #VALUE error by removing the bcnt loop as we discussed previously. In other words, try setting OLSregression = b in your final line of the first function. With some admittedly unrealistic data, we managed to just get a bunch of 0s for the values. Would you by ... Read More
It looks like you can get rid of the #VALUE error by removing the bcnt loop as we discussed previously. In other words, try setting OLSregression = b in your final line of the first function. With some admittedly unrealistic data, we managed to just get a bunch of 0s for the values. Would you by ... Read More
Re: DCF modeling in an M&A situation
Hi Leon, 1. In listed co's 2016 financials, the investment in Company A will most likely be accounted for using the equity method. Strip out company A's earnings to project the list co on a standalone basis. Project both companies separately and combine as part of your consolidation. 2. For yo... Read More
Hi Leon, 1. In listed co's 2016 financials, the investment in Company A will most likely be accounted for using the equity method. Strip out company A's earnings to project the list co on a standalone basis. Project both companies separately and combine as part of your consolidation. 2. For yo... Read More
Re: Suitable course
We would recommend three courses: 1) Advanced Financial Modeling: Core Model course - this will give you the integrated statement projection modeling 2) Segment Build-up Modeling - this will give you the process on constructing more detailed drivers of revenue and expenses 3) The debt piece in En... Read More
We would recommend three courses: 1) Advanced Financial Modeling: Core Model course - this will give you the integrated statement projection modeling 2) Segment Build-up Modeling - this will give you the process on constructing more detailed drivers of revenue and expenses 3) The debt piece in En... Read More
1) Capital leases are not considered debt for the purposes of TEV calculation for the same reason that operating leases are not. For interest expense ratios and debt ratios for credit purposes, you WOULD include BOTH capital and operating leases. Our footnote in cell A48 of Ratios tab specifies this... 1) Capital leases are not considered debt for the purposes of TEV calculation for the same reason that operating leases are not. For interest expense ratios and debt ratios for credit purposes, you WOULD include BOTH capital and operating leases. Our footnote in cell A48 of Ratios tab specifies this exclusion. In our debt focused financial modeling courses (not available online at this point unfortunately), we do in fact incorporate it correctly.
2) If Debt/Cap is lower than target then that means the company has some additional flexibility in altering their cap structure in the future, such as raising debt to fund stock buybacks, assuming the targets are reasonable.
3) This is provided by S&P - you would need a subscription to S&P or Moodys.
4) We rounded the figures in the Reference Range tab as you can see from the blue hard coded cells. No problem at all to make those a direct cell reference to the DCF tab as appropriate. Read More