Posts by: WST Expert 1
RE: Stock-Based Comp adjustment
Your asssessment is correct; however, if you never tell excel that stock-based comp is non-cash, IE, you embed within SG&A as it is most likely done as reported on 10Ks, then you don't have to make the adjustment. The incremental precision gained by modeling out stock-based comp and any option e... Read More
Your asssessment is correct; however, if you never tell excel that stock-based comp is non-cash, IE, you embed within SG&A as it is most likely done as reported on 10Ks, then you don't have to make the adjustment. The incremental precision gained by modeling out stock-based comp and any option e... Read More
Re: The Financial Modeling Process
You must complete the debt sweep first, then calculate you're interest expense/income. It will be the last step in the model. At that point all the numbers should tie. Recall that when first constructing the IS, interest expense/income are left blank. THEN that is the very LAST thing you do AFTER f... Read More
You must complete the debt sweep first, then calculate you're interest expense/income. It will be the last step in the model. At that point all the numbers should tie. Recall that when first constructing the IS, interest expense/income are left blank. THEN that is the very LAST thing you do AFTER f... Read More
RE: Mechanics of FCFF calculation
Yes, FCFF can be calculated for any time period. however, for purposes of DCF, you would want to calculate projected FCFF. Note that you don't necessarily have to have a complete financial model to do so - you can still estimate it by assuming growth rates on last known historical figures. There ... Read More
Yes, FCFF can be calculated for any time period. however, for purposes of DCF, you would want to calculate projected FCFF. Note that you don't necessarily have to have a complete financial model to do so - you can still estimate it by assuming growth rates on last known historical figures. There ... Read More
RE: General Inquiry
Unfortunately we do not allow editing of our macros as they are copyrighted. You would have to build a separate set of macros for your purpose. We constantly update our macros and it would be difficult to maintain all the different versions. Any customization would incur fees.absent a custom bui... Read More
Unfortunately we do not allow editing of our macros as they are copyrighted. You would have to build a separate set of macros for your purpose. We constantly update our macros and it would be difficult to maintain all the different versions. Any customization would incur fees.absent a custom bui... Read More
RE: How do convertible bonds affect total capitalization?
Yes, the TEV effectively increases as presumably, the post-conversion captial structure has more equity due to dilution. That's on the market value side. On the balance side side, correct, remove converts from debt as before and increase book value by the converted amt (shares * price /share). Howev... Read More
Yes, the TEV effectively increases as presumably, the post-conversion captial structure has more equity due to dilution. That's on the market value side. On the balance side side, correct, remove converts from debt as before and increase book value by the converted amt (shares * price /share). Howev... Read More
Re: Factoring subsidies into WACC
This is an interesting question that begs of the purpose of WACC. If the government subsidy is permanent - as in, it is GUARANTEED that they will ALWAYS receive it, then you can consider it to be permanent and you would alter WACC as follows: $150 total: $45 Gov't @ 0% cost of capital $73.5 debt @ ... Read More
This is an interesting question that begs of the purpose of WACC. If the government subsidy is permanent - as in, it is GUARANTEED that they will ALWAYS receive it, then you can consider it to be permanent and you would alter WACC as follows: $150 total: $45 Gov't @ 0% cost of capital $73.5 debt @ ... Read More
RE: How to value a company if we do or don't invest?
The question of current valuation with all known facts is a separate and independent issue from the capital raise in the future. Meaning that they are two disparate, unlinked events. If it is known with certainty that a capital raise two yrs later is to be done (and more importantly, the %age to be ... Read More
The question of current valuation with all known facts is a separate and independent issue from the capital raise in the future. Meaning that they are two disparate, unlinked events. If it is known with certainty that a capital raise two yrs later is to be done (and more importantly, the %age to be ... Read More
Re: Macro partially disabled
Look for Settings or Options within the Bloomberg menu/ribbon and see if you can disable their shortcut/hotkeys. Once you do that and restart Excel, you should have all functionality of Bloomberg and our shortcut keys. If you cannot find where to disable Bloomberg's shortcut keys, we'll need to trou... Read More
Look for Settings or Options within the Bloomberg menu/ribbon and see if you can disable their shortcut/hotkeys. Once you do that and restart Excel, you should have all functionality of Bloomberg and our shortcut keys. If you cannot find where to disable Bloomberg's shortcut keys, we'll need to trou... Read More
RE: What is the difference, if any between book tax vs GAAP tax?
GAAP requires the accrual method be used when companies create their financial statements. What you see on a company’s reported financial statement is commonly referred to as book. The pre-tax taxable income that a company reports to the IRS generally does not equate to pre-tax book (financial sta... Read More
GAAP requires the accrual method be used when companies create their financial statements. What you see on a company’s reported financial statement is commonly referred to as book. The pre-tax taxable income that a company reports to the IRS generally does not equate to pre-tax book (financial sta... Read More
When we have more time in our longer courses, we go thru this simple explanation: If I buy your company for $100MM and there is $10MM of excess cash on the books, and you aren't allowed to touch it b/c you sold it to me, I have effectively paid a total of $100MM less $10MM b/c I take the cash and... When we have more time in our longer courses, we go thru this simple explanation:
If I buy your company for $100MM and there is $10MM of excess cash on the books, and you aren't allowed to touch it b/c you sold it to me, I have effectively paid a total of $100MM less $10MM b/c I take the cash and pocket it immediately (assuming it's excess and not restricted cash). Thus, I have paid a total of only $90MM net (this is TEV) but you, the shareholder got $100MM, and so Equity Value is $100MM. It's perfectly fine to have TEV be less than Equity Value and that's exactly when capital structure arbitrage comes into play. Again, think about Microsoft - I can buy MSFT for it's market value (plus a premium most likely) which includes all that cash on the books. I simply take it and I have paid less than the market value, perfectly legit! I go into more detail on that in the online videos - so think about it, go thru the video when you get access to it and let me know if you still have any questions on it.
Hope that was helpful. Read More