Posts by: WST Expert 1
Re: Estimated Taxes
No, per our previous response, GAAP taxes is $400. NI is $600. You are confusing GAAP accounting with Cash accounting. Deferred Taxes would be $400-$20=$380 $20 is "current portion" and assumed to be paid OUT IN CASH that year (or taxes payable up by $20, considered to be part of working ... Read More
No, per our previous response, GAAP taxes is $400. NI is $600. You are confusing GAAP accounting with Cash accounting. Deferred Taxes would be $400-$20=$380 $20 is "current portion" and assumed to be paid OUT IN CASH that year (or taxes payable up by $20, considered to be part of working ... Read More
IRR calcs page on LBO Enhanced Model
1) Yes, the first set of sponsor returns should - that is the reason we built the second block of returns. You are also correct in that any dividends must be properly split between the holders - however, we build that functionality in because normally, the sponsor will get all the dividends that are... Read More
1) Yes, the first set of sponsor returns should - that is the reason we built the second block of returns. You are also correct in that any dividends must be properly split between the holders - however, we build that functionality in because normally, the sponsor will get all the dividends that are... Read More
Re: Options & Shares exercisable vs outstanding
In our Corporate Valuation video (pre-requisite to most courses), we state that for standalone valuation (even if valuing the in the context of an M&A or LBO), one is to use options exercisable because you are valuing the company as of now, today. As such, as of now, today, the exercisable optio... Read More
In our Corporate Valuation video (pre-requisite to most courses), we state that for standalone valuation (even if valuing the in the context of an M&A or LBO), one is to use options exercisable because you are valuing the company as of now, today. As such, as of now, today, the exercisable optio... Read More
Re: Minority Interest
1) Goodwill is created upon consolidation. In this case, for the "public limited company" Since you are acquiring over 50%, purchase accounting kicks in, so 100%. 2) 100% (since again, purchase accounting kicks in on entire entity, no such thing as proportionate consolidation. 3) Standard ... Read More
1) Goodwill is created upon consolidation. In this case, for the "public limited company" Since you are acquiring over 50%, purchase accounting kicks in, so 100%. 2) 100% (since again, purchase accounting kicks in on entire entity, no such thing as proportionate consolidation. 3) Standard ... Read More
Finding specific cells in a workbook
Two ways:
1) Find the file name that your file links to. Go to EDIT => LINKS and see a list. Then do a Find (Ctrl+F) for that file name on each worksheet one at a time.
2) Under EDIT => LINKS, click on Break Links. This removes all references, however ends up hard coding in place.
Two ways:
1) Find the file name that your file links to. Go to EDIT => LINKS and see a list. Then do a Find (Ctrl+F) for that file name on each worksheet one at a time.
2) Under EDIT => LINKS, click on Break Links. This removes all references, however ends up hard coding in place.
Re: Estimated Taxes
So, you're saying instead of 40% rate, their effective tax rate is 2%. Replace our previous answer with the new 2% instead of 40% and combined with your previous calculation of NI, re-do the math as such: EBT of $1,000 Taxes of $20 NI of $980 as you stated previously. Starting DTA of $5,000 implie... Read More
So, you're saying instead of 40% rate, their effective tax rate is 2%. Replace our previous answer with the new 2% instead of 40% and combined with your previous calculation of NI, re-do the math as such: EBT of $1,000 Taxes of $20 NI of $980 as you stated previously. Starting DTA of $5,000 implie... Read More
Re: Valuation - IRR
Yes, our Quick & Dirty LBO Modeling class calculates a simple IRR and our Complex LBO Modeling class calculates IRR in many different ways (triangulation of cash flows, with and without dividend payouts, etc). However, to simplistically answer your question, think of it this way - as you noted,... Read More
Yes, our Quick & Dirty LBO Modeling class calculates a simple IRR and our Complex LBO Modeling class calculates IRR in many different ways (triangulation of cash flows, with and without dividend payouts, etc). However, to simplistically answer your question, think of it this way - as you noted,... Read More
Re: Minority Interest
a) correct b) NCI would be created as part of the Trx Adj on the BS Pro Forma column. wipe out any old NCI and throw in new NCI = rollover equity amount. c) Usually, the debt providers (banks etc) like the debt as close to the cash as possible, so in your example, the operating company. the further ... Read More
a) correct b) NCI would be created as part of the Trx Adj on the BS Pro Forma column. wipe out any old NCI and throw in new NCI = rollover equity amount. c) Usually, the debt providers (banks etc) like the debt as close to the cash as possible, so in your example, the operating company. the further ... Read More
Why and how does the revolver balance the BS
This is covered in great detail in our Advanced Financial Modeling - Core Model class. Please see www.wstselfstudy.com and click on Course Descriptions for more information. In addition, you can go to www.wstselfstudy.com and click on Course Descriptions for more information. In addition, you can go to www.wallst-training.com and click on FREE RESOURCES to download our Circular Reference Exhibit which provides more color as well on the concepts. For FREE video based version of Circular References, go to www.wstselfstudy.com and click on FREE TRIAL. It is included as a free Exhibit course - no credit card required!!
In short, the Debt Sweep starts off with the subtotal of all the amounts the company has generated excluding cash and debt. THe Debt Sweep then decides the three main rules and logic: borrow more $$ if needed, build excess cash or pay down debt. That is the Revolver's balancing equation. After that, you must make sure the CFS properly links in Change in Debt (including mandatory repayments and any Revolver paydowns or borrowings). Link the rest of the CFS and BS as describe din our class (Adv FM-Core Model) and your BS should balance. At this point, you should balance regardless of the Interest Schedule which is what causes circs but you should balance before that.
Check out the rest of our topic forums for common reasons why your model doesn't balance! Read More
This is covered in great detail in our Advanced Financial Modeling - Core Model class. Please see www.wstselfstudy.com and click on Course Descriptions for more information. In addition, you can go to www.wstselfstudy.com and click on Course Descriptions for more information. In addition, you can go to www.wallst-training.com and click on FREE RESOURCES to download our Circular Reference Exhibit which provides more color as well on the concepts. For FREE video based version of Circular References, go to www.wstselfstudy.com and click on FREE TRIAL. It is included as a free Exhibit course - no credit card required!!
In short, the Debt Sweep starts off with the subtotal of all the amounts the company has generated excluding cash and debt. THe Debt Sweep then decides the three main rules and logic: borrow more $$ if needed, build excess cash or pay down debt. That is the Revolver's balancing equation. After that, you must make sure the CFS properly links in Change in Debt (including mandatory repayments and any Revolver paydowns or borrowings). Link the rest of the CFS and BS as describe din our class (Adv FM-Core Model) and your BS should balance. At this point, you should balance regardless of the Interest Schedule which is what causes circs but you should balance before that.
Check out the rest of our topic forums for common reasons why your model doesn't balance! Read More
1) Goodwill is usually created upon a change of control. For a greater than 50% stake but less than 100%, minority interest is created. So you model out the BS combination as if you own 100% of the target and then create minority interest which is essentially a pro-rata of the book value that is own... 1) Goodwill is usually created upon a change of control. For a greater than 50% stake but less than 100%, minority interest is created. So you model out the BS combination as if you own 100% of the target and then create minority interest which is essentially a pro-rata of the book value that is owned by minority shareholders.
2) In many cases, 80% of the target must be acquired. Since each transaction is unique, you would have to consult your accountants on this one.
3) Since Recap Accounting is no longer used today, everything is Purchase Accounting. We model in Recap Accounting for actual recapitalizations (company buys back 35% of its shares) and for our Status Quo, No Transaction case.
4) This is covered in our Complex LBO Modeling class thoroughly.
5) It should be the new EBITDA not Status Quo. Since LBOs are financial transactions, we didn't model out synergies but you could surely add that in. Just don't forget to add the cost of restructuring as well to be fair.
6) LBOs are basically stock transactions not asset deals (certain countries like UK would see a lot of asset deals). Because existing shareholders are blown out, asset deals don't really apply.
7) Of course, you can LBO a private company. We have executed many LBOs on middle market companies. In terms of difficulties - buying a private company is a completely different animal than buying a public company. Stay tuned for our Private Company M&A class!