Re: Historical Cash & Equivalent Reconciliation
We never bother to reconcile historical cash flow statement. Why not? Because you'll never know the adjustments the the company made. For instance, the change in A/R or A/P contains write-downs or other accruals that will not make the BS change exactly equal to the CF figures.

Re: Intangible Asset Amortization
Amortization of intangibles is typically disclosed in the footnotes or MD&A of the 10K as it is required by the SEC as a disclosure. In the event this truly is not found in the 10K or otherwise, and if the company has indeed discussed amortization expense in COGS and OpEx (well actually that's your ... Amortization of intangibles is typically disclosed in the footnotes or MD&A of the 10K as it is required by the SEC as a disclosure. In the event this truly is not found in the 10K or otherwise, and if the company has indeed discussed amortization expense in COGS and OpEx (well actually that's your disclosure, and they are required to also provide next 5 years estimate), then you can certainly use the historical information to project the future. You can see if there is a clear trend such as growth rate, or percent of COGS and OpEx, etc.

Based on the materiality of the amortization amounts, we would not recommend splitting out extra line items directly on the Income Statement and just have it at the bottom calculations. However, if the company is highly acquisitive and the amortization figures are indeed material, then we would split it out and even calculate COGS and OpEx separately without the impact of amortization. How you eventually decide to show on the Income Statement is optional and based on your preference.

For sure, take pains to make sure you do not accidentally double count. Read More

Re: new to finance
Hello, Thank you for your inquiry. We feel taking the CFA is overkill to learn accounting, even if you focus on just the accounting portions. Our issue with books and textbooks is that they do not focus on what you need to know about accounting from the FINANCE perspective. And that's exactly how... Hello,
Thank you for your inquiry.
We feel taking the CFA is overkill to learn accounting, even if you focus on just the accounting portions. Our issue with books and textbooks is that they do not focus on what you need to know about accounting from the FINANCE perspective. And that's exactly how we designed our Accounting courses - to cut through the 400 pages and just give you the 40 pages you need to know in finance. Obviously that sounds like a self-promotion and plug, therefore, you probably cannot go wrong with whatever the top selling accounting books on Amazon - plus you'll save some money, the trade-off being you'll spend a lot of time and energy not being focused on what you need to know, although eventually you'll be able to pick it all up.

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Re: Beta for Cost of Equity
One commonly accepted approach is to make a beta calculation using historical stock data. You could take a calendar year of daily closing prices for the S&P 500 index and the stock in question. Calculate each day's % change from the previous day, and then use something like the COVARIANCE.P or SL... One commonly accepted approach is to make a beta calculation using historical stock data. You could take a calendar year of daily closing prices for the S&P 500 index and the stock in question.

Calculate each day's % change from the previous day, and then use something like the COVARIANCE.P or SLOPE function to arrive at your "raw" beta number.

Of course, beyond that, you may opt to also get "adjusted" beta, which assumes that this stock's beta will drift toward the market average over time. Typically you simply weight it two-thirds to the raw beta, and one-third to 1.0. Read More

Re: why Revolver is reduced after you put 6000$ in cash in 2006 ? Please answer urgently thank you
We are putting in a negative number for minimum cash balance which reduces the amount of cash that you can use. Therefore, you have to borrow on revolver to maintain minimum level of cash.