Posts by: WST Expert 1
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
Re: Capital Leases, and other scenarios
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... 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... Read More
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
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... 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 capital structure. However, if the FMV of the hedging instruments are "guaranteed" (no such thing in the real world), then we can see a possible argument made for treating like cash. Again, we'd initially caution against this and would ask for much more context. Read More