Posts by: WST Expert 1
RE: Accounting: ROC
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
Re: Gordon growth / growing perpetuity method used to value?
Correct. the course you are referring to is a SIMPLE approach for concepts.
the "simple DCF" doesn't incorporate the cash flows earned and just uses gordon growth.
ditto for DDM - which is valuing the stock price and hence the equity value (not TEV).
Correct. the course you are referring to is a SIMPLE approach for concepts.
the "simple DCF" doesn't incorporate the cash flows earned and just uses gordon growth.
ditto for DDM - which is valuing the stock price and hence the equity value (not TEV).
RE: Do you need to adjust EBITDA for non-cash items?
EBITDA - no adjustment for non-cash, remember it's a proxy for cash flow, not trying to really figure out cash flow. It's supposed to measure core ability to generate cash - if you want true cash flow, I would point to FCFF instead which incorporates Working Capital changes (and obviously CapEx). ... Read More
EBITDA - no adjustment for non-cash, remember it's a proxy for cash flow, not trying to really figure out cash flow. It's supposed to measure core ability to generate cash - if you want true cash flow, I would point to FCFF instead which incorporates Working Capital changes (and obviously CapEx). ... Read More
Re: Discounted EVA approach
Actually, we don't really like EVA much - it originally took on importance as a mgmt compensation metric as opposed to a valuation approach. By definition, it will yield a lower valuation since you are subtracting out the cost of capital, so you can think of it almost as an attempt to measure "... Read More
Actually, we don't really like EVA much - it originally took on importance as a mgmt compensation metric as opposed to a valuation approach. By definition, it will yield a lower valuation since you are subtracting out the cost of capital, so you can think of it almost as an attempt to measure "... Read More
Re: DCF analysis: net debt should be actual not est
You are correct. the footnote in A42 should say PV as of Jan 31, 2006 which is our "Fiscal 2005". Good catch! We messed that one up (big no-no!) because normally fiscal years are dec 31 year end. so normally we say Dec 31 of and then the first estimated year minus one. which is the same as... Read More
You are correct. the footnote in A42 should say PV as of Jan 31, 2006 which is our "Fiscal 2005". Good catch! We messed that one up (big no-no!) because normally fiscal years are dec 31 year end. so normally we say Dec 31 of and then the first estimated year minus one. which is the same as... Read More
Re: Ev calc? Inlcude postretirement liab's and pension liab's?
Comps are relevant because you have to see the treatment across board. If all comps have the same problem then you have to go with what the market is treating everyone else at. Short answer: do not include liabilities when calc'ing TEV from stock price Slightly longer answer: when buying the compa... Read More
Comps are relevant because you have to see the treatment across board. If all comps have the same problem then you have to go with what the market is treating everyone else at. Short answer: do not include liabilities when calc'ing TEV from stock price Slightly longer answer: when buying the compa... Read More
RE: ROE vs Revenue as stock return predictor
1) Revenue - correct, it does not capture expenses or profit margins. the "retention" of the revenue is very important! the more of that dollar of revenue you keep, the more it is worth! 2) ROE is an important metric for banks because they employ leverage - they borrow deposits and use that to ma... Read More
1) Revenue - correct, it does not capture expenses or profit margins. the "retention" of the revenue is very important! the more of that dollar of revenue you keep, the more it is worth! 2) ROE is an important metric for banks because they employ leverage - they borrow deposits and use that to ma... Read More
RE: Accounting: KEY RATIOS....
I don't have work experience in the field either. So I won't comment on about the employers' expectations. However, IMHO, understanding key ratios is quite important with respect to the work of an analyst. Analyst's work is to convert the clutter of financial information into knowledge revealing ... Read More
I don't have work experience in the field either. So I won't comment on about the employers' expectations. However, IMHO, understanding key ratios is quite important with respect to the work of an analyst. Analyst's work is to convert the clutter of financial information into knowledge revealing ... Read More
Re: Seg/rev build up questions
Just the WMT Segment is repeated.
the full Segment course has total 4 segment build-up approaches.
You are correct on the International vs Net International labels.
Just the WMT Segment is repeated.
the full Segment course has total 4 segment build-up approaches.
You are correct on the International vs Net International labels.
YES! CapEx that is not purely maintenance capex is to be reflected in the Free Cash Flow to Firm calculation! To do is would be remiss and excluding a significant portion of cash that doesn't below to the firm's stakeholders!