Posts by: WST Expert 1
Re: Diluted Shares Outstanding Excel Equation
If the value of the equation to the right of the "0" is negative, that means the options are not in-the-money. This can be quickly confirmed by observing that the exercise price is above the share price. Hence, when dividing, it yields a number greater than zero, so when you do 1-that number, it pro... Read More
If the value of the equation to the right of the "0" is negative, that means the options are not in-the-money. This can be quickly confirmed by observing that the exercise price is above the share price. Hence, when dividing, it yields a number greater than zero, so when you do 1-that number, it pro... Read More
Re: Calculating Free Cash Flow for a business unit
Without any additional information, we would suggest you allocate it similar to your allocation for depreciation and CapEx. If those relative percent distributions the same (they should be since CapEx and depreciation are tied together), then you can guesstimate using same % for working capital. Of ... Read More
Without any additional information, we would suggest you allocate it similar to your allocation for depreciation and CapEx. If those relative percent distributions the same (they should be since CapEx and depreciation are tied together), then you can guesstimate using same % for working capital. Of ... Read More
Re: Risk Free Rate (what to use)
This is covered extensively in our Finance 101 video. As we are sure you can understand, it would be too cumbersome to explain our entire course's section on this topic in this forum, which is meant for specific questions that are not covered in our courses or for clarifications above and beyond wha... Read More
This is covered extensively in our Finance 101 video. As we are sure you can understand, it would be too cumbersome to explain our entire course's section on this topic in this forum, which is meant for specific questions that are not covered in our courses or for clarifications above and beyond wha... Read More
Re: Calculating Free Cash Flow for a business unit
Unfortunately, you are stuck. At minimum, you would need a barebones set of individual Income Statements and you could at least guesstimate an allocation of Depreciation, CapEx etc (based on pro-rata revenue split assuming that's relevant/appropriate). Without EBIT figures by division, you don't hav... Read More
Unfortunately, you are stuck. At minimum, you would need a barebones set of individual Income Statements and you could at least guesstimate an allocation of Depreciation, CapEx etc (based on pro-rata revenue split assuming that's relevant/appropriate). Without EBIT figures by division, you don't hav... Read More
Re: Minimum Cash Balance
None that immediately come to mind. Usually you have excess cash that you use to fund the deal. Think the Dell LBO as perfect example.
None that immediately come to mind. Usually you have excess cash that you use to fund the deal. Think the Dell LBO as perfect example.
Re: Minimum Cash Balance
Yes you are correct - but it's just math. If you have $25 of cash and set minimum cash to say, $40, then you have a negative source of cash of $15, which means a use of funds - you need to raise more debt or equity (using funds to fund the minimum cash balance required). However, mechanically on the... Read More
Yes you are correct - but it's just math. If you have $25 of cash and set minimum cash to say, $40, then you have a negative source of cash of $15, which means a use of funds - you need to raise more debt or equity (using funds to fund the minimum cash balance required). However, mechanically on the... Read More
Re: Minimum Cash Balance
Minimum cash balance is considered a source of fund, since you are using your excess cash as a source of funds in the deal. To calculate excess cash, we take existing cash balance and subtract out the minimum requirement. This is covered extensively in our LBO modeling course - sounds like you need ... Read More
Minimum cash balance is considered a source of fund, since you are using your excess cash as a source of funds in the deal. To calculate excess cash, we take existing cash balance and subtract out the minimum requirement. This is covered extensively in our LBO modeling course - sounds like you need ... Read More
Re: Projecting minority interest
If MI is non-cash pay (true in the VAST majority of cases)... 1) Note that the MI expense on the IS tends to be negative 2) The MI liability account on the BS will go UP (IOU up) 3) YOU MUST have a corresponding entry on CF (CFO, not part of WC) That accounts for the change in MI balance on th... Read More
If MI is non-cash pay (true in the VAST majority of cases)... 1) Note that the MI expense on the IS tends to be negative 2) The MI liability account on the BS will go UP (IOU up) 3) YOU MUST have a corresponding entry on CF (CFO, not part of WC) That accounts for the change in MI balance on th... Read More
Re: WACC for private company
A private company certainly has a cost of equity - it just requires a bit more work to quantify via CAPM given there is no public stock information. All forms of capital must be incorporated in WACC analysis. Usually the question is if a private company has no debt, is WACC simply its cost of equity... Read More
A private company certainly has a cost of equity - it just requires a bit more work to quantify via CAPM given there is no public stock information. All forms of capital must be incorporated in WACC analysis. Usually the question is if a private company has no debt, is WACC simply its cost of equity... Read More
To calculate the amount of cumulative debt paid down, simply calculate each projected year end debt balance less the pro forma ending debt balance (right after the LBO). Alternately, for % paid down, just calculate a percent change off the pro forma ending debt balance. Make sure to anchor the PF de... To calculate the amount of cumulative debt paid down, simply calculate each projected year end debt balance less the pro forma ending debt balance (right after the LBO). Alternately, for % paid down, just calculate a percent change off the pro forma ending debt balance. Make sure to anchor the PF debt balance cell reference in both cases. This prevents the need to separately calculate an actual cumulative dollar amount. Read More