Posts by: WST Expert 1
RE: Insurance Company LBO Question
Typically, if holdco raises new capital inform of debt + equity, it would invest that capital directly downstream into insco. So, the total proceeds are treated as a contribution to statutory surplus at the subsidiary level. If it's an acquisition and there's no new cash created at holdco, then ther... Read More
Typically, if holdco raises new capital inform of debt + equity, it would invest that capital directly downstream into insco. So, the total proceeds are treated as a contribution to statutory surplus at the subsidiary level. If it's an acquisition and there's no new cash created at holdco, then ther... Read More
RE: SHLD Inputs on complex tr comps
1) use judgement as explained in the video. the point is, you have to READ the entire filing which most people don't do. Remember, Murphy's Law - the one time you don't, you get burned. 2) Yes, however, it is still an actual - it would not be inappropriate to exclude it. 3) Please refer back t... Read More
1) use judgement as explained in the video. the point is, you have to READ the entire filing which most people don't do. Remember, Murphy's Law - the one time you don't, you get burned. 2) Yes, however, it is still an actual - it would not be inappropriate to exclude it. 3) Please refer back t... Read More
Re: Liabilities and Interest Expense
This topic of leases (capital and operating) is covered extensively in our Private Company Valuation course: http://www.wstselfstudy.com/privateval.html Feel free to use elearning discount code for 10% off... Read More
This topic of leases (capital and operating) is covered extensively in our Private Company Valuation course: http://www.wstselfstudy.com/privateval.html Feel free to use elearning discount code for 10% off... Read More
RE: Treatment of liabilities on the BS (as debt) in an M&A
The answer is no - when we look at transaction value, we are trying to gauge financial value not operating related items. Long term liabilities and working capital and other non-financial securities are to be excluded. Deferred income taxes also fall in that category since that's not a capital struc... Read More
The answer is no - when we look at transaction value, we are trying to gauge financial value not operating related items. Long term liabilities and working capital and other non-financial securities are to be excluded. Deferred income taxes also fall in that category since that's not a capital struc... Read More
RE: Company Profiles: Questions about slides
Total capital includes all sources of capital - primarily debt and equity. You don't include cash because after you raise the $ from debt and equity, you get cash. However, for valuation and TEV purposes you use net debt to arrive at equity value, or the residual value to owners which is net of ... Read More
Total capital includes all sources of capital - primarily debt and equity. You don't include cash because after you raise the $ from debt and equity, you get cash. However, for valuation and TEV purposes you use net debt to arrive at equity value, or the residual value to owners which is net of ... Read More
RE: No most recent Q available
Normally, the best practice is to footnote the LTM period. Since companies don't issue press releases on the same day, but might span a couple of weeks even, you update your comps as you go along and then you clearly footnote which ones are the exceptions. So yes, you do mix them, but only for that ... Read More
Normally, the best practice is to footnote the LTM period. Since companies don't issue press releases on the same day, but might span a couple of weeks even, you update your comps as you go along and then you clearly footnote which ones are the exceptions. So yes, you do mix them, but only for that ... Read More
Re: Purchase Price Allocation
Good questions! 1) Short answer: because you are re-valuing everything, particularly FMV allocation per FASB141/142 and IFRS3, the differences in book (GAAP) and tax values are wiped out, and thus, the corresponding DTL is also wiped away and reconciled. Keep in mind, per our advanced merger courses... Read More
Good questions! 1) Short answer: because you are re-valuing everything, particularly FMV allocation per FASB141/142 and IFRS3, the differences in book (GAAP) and tax values are wiped out, and thus, the corresponding DTL is also wiped away and reconciled. Keep in mind, per our advanced merger courses... Read More
RE: How can a Company with little cash do an all-cash deal?
If Company XYZ has minimal cash on its balance sheet but is looking to make an all-cash acquisition they can borrow the cash by taking on debt. The amount of debt that they are able to borrow depends on how much debt they currently have on the balance sheet and at what point will the Company max out... Read More
If Company XYZ has minimal cash on its balance sheet but is looking to make an all-cash acquisition they can borrow the cash by taking on debt. The amount of debt that they are able to borrow depends on how much debt they currently have on the balance sheet and at what point will the Company max out... Read More
RE: Quick simple offer value question
In short, you are buying the EQUITY and assuming (or refinancing the debt). For the full complete answer, we will have to direct you to our Corproate Valuation online courses - particularly the part about Total Enterprise Value calculation as well as our M&A Deal Structuring and Merger Modeli... Read More
In short, you are buying the EQUITY and assuming (or refinancing the debt). For the full complete answer, we will have to direct you to our Corproate Valuation online courses - particularly the part about Total Enterprise Value calculation as well as our M&A Deal Structuring and Merger Modeli... Read More
Short answer (subject to change based on nuances and your actual approach), is not to adjust for ESO. Because we assume the cash required by the company upon exercise is raised by issuing new shares (hence treasury method of adjusting for dilutive options). If one adjusts for ESO as a non-cash adj... Short answer (subject to change based on nuances and your actual approach), is not to adjust for ESO. Because we assume the cash required by the company upon exercise is raised by issuing new shares (hence treasury method of adjusting for dilutive options).
If one adjusts for ESO as a non-cash adjustment, then you should adjust for taxes payable (not part of working cap) and all the other non-cash items that’s below NI/Depr, and above Working Capital on CF statement. Read More