Re: Question on Calculating EBITDA for Healthcare companies
To clarify on #3, old rules stated IPRD is expensed so its a merger adjustment to opening BS and as such, never hits future IS. So ppl generally like making changes to reverse new accounting rules until is 100% accepted by entire finance community and again, calculating normalized EBITDA.

RE: Original Issuer Discount
No - it's 8% off $100. it's always off face value/principal.

Think of the $25 as amortization of debt financing fees that we talked about in class.
Thus, it's added as an asset and amortized over the 5 yrs pro-rata. Go straight to our lbo or super adv m&a model for the proper treatment.

Re: UNINSTALL WST ADD-INS FROM EXCEL 2007
Go to Tools => Add-ins (Alt + T + I) and uncheck the WST macros in the Add-in dialog box. hit OK. WST is now uninstalled from the Add-In ribbon on top and the shortcuts de-activated. To completely remove the macros, hit Alt + T + I again, click on Browse and delete the actual macro file. Hit Canc... Go to Tools => Add-ins (Alt + T + I) and uncheck the WST macros in the Add-in dialog box. hit OK. WST is now uninstalled from the Add-In ribbon on top and the shortcuts de-activated. To completely remove the macros, hit Alt + T + I again, click on Browse and delete the actual macro file. Hit Cancel or ESC to return to the Add-in dialog box. Then click on the WST macros option, it will say not found, do you want to remove from list. Hit Yes or OK and the WST macros will be completely removed. In future, if you want to remove other macros, follow the same procedure. To re-install our WST macros, go to www.wallst-training.com and click on FREE RESOURCES. Read More

RE: Free Cash Flow Tax Adjustment for Depreciation
Keep in mind the bigger picture. You are using book depreciation because the difference between tax and ook depreciation can be thought of as a working capital change which is in change in working capital in fcff calculation. Although technically deferred tax liabilities (which is difference btwn bo... Keep in mind the bigger picture. You are using book depreciation because the difference between tax and ook depreciation can be thought of as a working capital change which is in change in working capital in fcff calculation. Although technically deferred tax liabilities (which is difference btwn book and tax depreciation) is not part of working capital, you may assume such item is included in working capital. If you want to get specific then why not add deferred compensation adjustments and the countless other items in cfo? Thus, fcff is surely an estimate, meant to capture the biggest items and the smaller items are either immaterial or a wash. If you know a specific item is large, take it on a case by case basis (ie acquistions potentially, etc).

So, don't kill too many brain cells over this one. For better or worse, it is what it is. Note that some ppl, specifically economic analysis do attempt to make such adjustments. Read More

Re: Advance Financial Modeling- Core Model Questions on CF
Generally speaking, you will go with the company's classification of working capital, as they know best what is inside each line item. This can clearly be ascertained by looking at their CFO on the Cash Flow Statement to see where they placed the items. THey are usually grouped together with some so... Generally speaking, you will go with the company's classification of working capital, as they know best what is inside each line item. This can clearly be ascertained by looking at their CFO on the Cash Flow Statement to see where they placed the items. THey are usually grouped together with some sort of indentation or heading within CFO to indicate Working Capital.

For Share Repurchases, using trailing EPS to guesstimate future stock price that the company buys back their stock at is fair - just use LTM (last twelve months) PE multiple to calculate Implied Stock Price. Read More