Re: a question about circular references
For financial models that seek to assume consistent assumptions about the mgmt's share buyback plans, you can guestimate the $ volume of share repurchases each year based on information provided and explained in the Advanced Financial Modeling - Core Model class. However, that doesn't speak anything... For financial models that seek to assume consistent assumptions about the mgmt's share buyback plans, you can guestimate the $ volume of share repurchases each year based on information provided and explained in the Advanced Financial Modeling - Core Model class. However, that doesn't speak anything about the assumed buyback price of each share. This is needed to calculate the number of actual shares repurchased each year, which will of course influence your basic share count and thus, impact dividends and of course, EPS in the future.

Since the model requires an assumption of that year's stock price, usually based on PE ratio, but however, you do not yet know your EPS, which is influenced by the entire model (look at our free Circular Reference exhibit and video course explaining interest, same logic!). Thus, to avoid circs for this part, we use trailing PE (based on last year's or LTM EPS) - just make sure the assumed PE ratio is reasonable. By using last year's EPS, this is akin to using beginning debt/cash balance to calc interest, thus avoiding circs. Read More

Re: Distressed Debt Model
The idea is that you want to argue to the judge what happens when the valuation is incorrect - you are unjustly enriching certain parties. The two key drivers of fulcrum are post-petition valuation and post-petition leverage, both of which impact recovery rates of the senior securities in the capita... The idea is that you want to argue to the judge what happens when the valuation is incorrect - you are unjustly enriching certain parties.
The two key drivers of fulcrum are post-petition valuation and post-petition leverage, both of which impact recovery rates of the senior securities in the capital structure. So, if the valuation or leverage is "wrong", then certain securities get too much recovery vs those lower in the capital structure. Notice that Case 10 compares recovery rates based off Case 9. Read More

Re: about the diluted shares outstanding
When initially building the first pass on the IS (before BS and CF), we simply say set this projected year's diluted shares outstanding to last year's for simplicity. Then, when we have finished our Cash Flow Statement construction, we have an actual updated basic shares outstanding count after the... When initially building the first pass on the IS (before BS and CF), we simply say set this projected year's diluted shares outstanding to last year's for simplicity.

Then, when we have finished our Cash Flow Statement construction, we have an actual updated basic shares outstanding count after the effect of share repurchases (refer to another of your posts). After that, to complete our new diluted shares outstanding estimate, we throw in the effect of dilutive options via treasury method.

Keep in mind that you cannot just use basic shares outstanding, since we care about diluted EPS.
Also, the basic shares outstanding on the IS reflects the WEIGHTED AVERAGE amount throughout the year, whereas we want to start with the latest available as of the model, which is given in the front of the 10K filing for US filers and in a footnote in non-US annual reports. Read More

RE: Advanced Excel: Pivot Tables Error Message
Please make sure that you have saved the file separately to the desktop or otherwise as opposed to working off a "temp" version of the template file. If working directly off your desktop or hard drive and the same error msg occurs, please recreate the pivot table from scratch as their may be a ... Please make sure that you have saved the file separately to the desktop or otherwise as opposed to working off a "temp" version of the template file.

If working directly off your desktop or hard drive and the same error msg occurs, please recreate the pivot table from scratch as their may be a problem with the source underlying data when initially created.

Also, please make sure that you are creating a PivotTable and not a PivotChart. We do not encourage PivotCharts as they actually reduce flexibility and control of your chart.

Thank you. Read More

Re: Question about EPS
No circular references in that logic, because the key is that we use PRIOR YEAR's EPS on the CF to estimate number of shares repurchased. If we used THIS YEAR's EPS, then yes, we get a circular reference. See your other post for more detailed explanation.