Posts by: WST Expert 1
Re: Balance Sheet Not Balancing
Incidentally, this accounts for 90% of the reason why a BS doesn't balance. Aside from formula mistakes that is.
Incidentally, this accounts for 90% of the reason why a BS doesn't balance. Aside from formula mistakes that is.
Re: taxes
That is correct. This is consistent with GAAP accounting and reconciliation to "cash taxes". In addition, GAAP taxes would show "Current" and "Deferred". In our tax schedule build-up, the amount you pay the IRS is "Current" and "Deferred" is the diff... Read More
That is correct. This is consistent with GAAP accounting and reconciliation to "cash taxes". In addition, GAAP taxes would show "Current" and "Deferred". In our tax schedule build-up, the amount you pay the IRS is "Current" and "Deferred" is the diff... Read More
RE: Please elaborate why cash is deducted from enterprise value.
Cash is deducted from Enterprise Value and has nothing to do with M&A and form of consideration an acquiror uses (which could be 100% stock). cash is the direct opposite of debt so therefore, one could use excess cash to pay down debt and hence, deducted from Enterprise Value.
Cash is deducted from Enterprise Value and has nothing to do with M&A and form of consideration an acquiror uses (which could be 100% stock). cash is the direct opposite of debt so therefore, one could use excess cash to pay down debt and hence, deducted from Enterprise Value.
RE: Corporate Valuation Methodologies: capital lease
Correct points and observations but operating leases are also tax deductible. Of course there is the whole timing difference of depreciation and interest but putting that aside, the more significant figure is the entire amount that is off balance sheet vs on balance sheet. Keep in mind rating agneci... Read More
Correct points and observations but operating leases are also tax deductible. Of course there is the whole timing difference of depreciation and interest but putting that aside, the more significant figure is the entire amount that is off balance sheet vs on balance sheet. Keep in mind rating agneci... Read More
RE: JCP Trading Comps: about EBIT and impairment
1) We don't care about the company's definition nor presentation. If they were smarter they would have done a better job presenting their IS like the rest of the world does it. But they didn't. If you use Gross Margin less SG&A you are leaving out a critical piece of RECURRING income, namely... Read More
1) We don't care about the company's definition nor presentation. If they were smarter they would have done a better job presenting their IS like the rest of the world does it. But they didn't. If you use Gross Margin less SG&A you are leaving out a critical piece of RECURRING income, namely... Read More
RE: Why is minority interest NOT included in M&A analysis?
Minority Interest: when you buy a company, you don't pay for MI because you aren't buying out the minority shareholders. For standalone Enterprise Value Value calculations, you include it because 100% of the subsidiary is on your books. The Enterprise Value includes the effect of 100% of the consoli... Read More
Minority Interest: when you buy a company, you don't pay for MI because you aren't buying out the minority shareholders. For standalone Enterprise Value Value calculations, you include it because 100% of the subsidiary is on your books. The Enterprise Value includes the effect of 100% of the consoli... Read More
RE: Complex Trading Comps Analysis: COST Inputs
1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock pri... Read More
1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock pri... Read More
Re: Accounting Bootcamp- Short term debt CFO or CFF
Great question! To help clarify, when we think of working capital (changes in CA and CL) they are ONLY operating related activities NOT financing related. As such, changes in any debt related items (under US GAAP) will definitely fall under CFF as opposed to CFO. Think of it this way - anything that... Read More
Great question! To help clarify, when we think of working capital (changes in CA and CL) they are ONLY operating related activities NOT financing related. As such, changes in any debt related items (under US GAAP) will definitely fall under CFF as opposed to CFO. Think of it this way - anything that... Read More
RE: Private Company M&A and LBO adjustments
The ramifications for a private company vs a public company are very similar - the major difference is that there is no EPS and Shares Outstanding. Thus, to "fudge it", you could assume that there is one Share Outstanding or, better yet, to be more precise, you would use Net Income => so instead ... Read More
The ramifications for a private company vs a public company are very similar - the major difference is that there is no EPS and Shares Outstanding. Thus, to "fudge it", you could assume that there is one Share Outstanding or, better yet, to be more precise, you would use Net Income => so instead ... Read More
Back to tax rates again - you could have used the statutory tax rate of 35% but we decided to use 40% for ALL adjustments and so we chose to be consistent. If there is a significant difference between the rates, then you would have to pick the marginal rate, per your previous question.