Posts by: WST Expert 1
Re: Break out depreciation from cost of goods sold or operating expenses
The challenge is that depreciation belongs in both COGS and SG&A, but the proper breakdown is not usually provided in public documents. If you have access to management accounts, then you'd be able do a deeper dive and get more granular.
The challenge is that depreciation belongs in both COGS and SG&A, but the proper breakdown is not usually provided in public documents. If you have access to management accounts, then you'd be able do a deeper dive and get more granular.
Re: Using average receivables
In all our training and live deal models, we never use average receivables for balance sheet WC drivers for this very reason. For non-annual models (such as quarterly or monthly), cyclical fluctuations and the use of averages will yield very inaccurate numbers. Separately, if all numbers (such a... Read More
In all our training and live deal models, we never use average receivables for balance sheet WC drivers for this very reason. For non-annual models (such as quarterly or monthly), cyclical fluctuations and the use of averages will yield very inaccurate numbers. Separately, if all numbers (such a... Read More
Re: Quiz and Exam locations??
The Accounting-related quiz is actually an exercise that's now part of the first course in Package 1: Accounting & Financial Statement Integration. You should already have access to that - specifically, the accounting exercise (with answers) is in the third and fourth chapter of the course, right af... Read More
The Accounting-related quiz is actually an exercise that's now part of the first course in Package 1: Accounting & Financial Statement Integration. You should already have access to that - specifically, the accounting exercise (with answers) is in the third and fourth chapter of the course, right af... Read More
Re: Location of additional file that is referened?
Hello, there's an exhibit video discussing depreciation vs. capital expenditures here: "Overview of Financial Markets + Exhibits" package -> "Supplementary Video Exhibits" -> "Depreciation in Future" Please let us know if you're looking for something else and we'll point you in the right directio... Read More
Hello, there's an exhibit video discussing depreciation vs. capital expenditures here: "Overview of Financial Markets + Exhibits" package -> "Supplementary Video Exhibits" -> "Depreciation in Future" Please let us know if you're looking for something else and we'll point you in the right directio... Read More
Re: what are the valuation method for non publicly traded banks ?
If a bank isn't publicly traded, we must include a private company discount on the valuation. So in that case, we'd use the techniques covered in our "Private Company Valuation" package. Non-public companies can be difficult, but not impossible to value. To learn more, select "Order More" at the ... Read More
If a bank isn't publicly traded, we must include a private company discount on the valuation. So in that case, we'd use the techniques covered in our "Private Company Valuation" package. Non-public companies can be difficult, but not impossible to value. To learn more, select "Order More" at the ... Read More
Re: valuation for Balance Sheet based company like banks and insurance
Unlike more traditionally structured companies, banks and insurance carriers do not adhere to the concept of TEV. For example, cash in most businesses is relatively straightforward. But for a bank, cash is both COGS *and* Revenue, in different forms. So the concepts of cash and debt no longer apply ... Read More
Unlike more traditionally structured companies, banks and insurance carriers do not adhere to the concept of TEV. For example, cash in most businesses is relatively straightforward. But for a bank, cash is both COGS *and* Revenue, in different forms. So the concepts of cash and debt no longer apply ... Read More
Re: Multi currency model
The best practice is to always model out everything in functional currency. So if you have a USD portfolio and a EUR portfolio (different portfolios), model those out in their specific local currency (USD and EUR). Then translate each of them separately to the local (reported) currency and then c... Read More
The best practice is to always model out everything in functional currency. So if you have a USD portfolio and a EUR portfolio (different portfolios), model those out in their specific local currency (USD and EUR). Then translate each of them separately to the local (reported) currency and then c... Read More
Re: Multi currency model
We do not have a separate training module for multi-currency modeling, although we do adhere to a set of best practices when working in these situations. If you have a more specific question, we’d be more than happy to reply.
We do not have a separate training module for multi-currency modeling, although we do adhere to a set of best practices when working in these situations. If you have a more specific question, we’d be more than happy to reply.
Re: Cost of Funding
For borrowing cost, we would simply take the actual weighted average coupon (or yield) of the bank. For yield, you can easily obtain via current market data. Please don't over think this. For WACC, yes include weighted average cost of equity as well. There are PLENTY of academic papers with quite co... Read More
For borrowing cost, we would simply take the actual weighted average coupon (or yield) of the bank. For yield, you can easily obtain via current market data. Please don't over think this. For WACC, yes include weighted average cost of equity as well. There are PLENTY of academic papers with quite co... Read More
In our training, we do not advise using average receivables for balance sheet drivers. Of course, if there's a specific part of one of the videos that you'd like us to clarify, please let us know and we'll be glad to revisit them together.
That said, average should be used for comps.