Posts by: WST Expert 1
RE: Corporate Valuation: DCF valuation
Per our videos in Corporate Valuation, DCF is merely a starting point to intelligently and methodically substantiate "intrinsic value" but by no means is an "end-all, is-all". The folks on the buy-side (i.e. hedge funds) don't even look at DCF since it is "timeless" - you are never wrong, since you ... Read More
Per our videos in Corporate Valuation, DCF is merely a starting point to intelligently and methodically substantiate "intrinsic value" but by no means is an "end-all, is-all". The folks on the buy-side (i.e. hedge funds) don't even look at DCF since it is "timeless" - you are never wrong, since you ... Read More
RE: Accounting changes
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
Re: quick question
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... 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... Read More
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
Debt financing fees range anywhere between 25bps/50bps for revolver facilities to as high as 1-2% for more junior debt. The amt of financing fees would be dependent on the specific tranches of debt raised. Likewise, tender costs for existing debt that is refinanced would vary based on the PV of futu... Debt financing fees range anywhere between 25bps/50bps for revolver facilities to as high as 1-2% for more junior debt. The amt of financing fees would be dependent on the specific tranches of debt raised. Likewise, tender costs for existing debt that is refinanced would vary based on the PV of future interest expense that the bondholder would no longer receive (map out future cash flows for each bond and PV back at coupon rate/YTM). Legal fees are fairly static (not really all that variable unless extremely complicated of a deal) - probably $500K to $1MM (but don't take that as the word).
the $750 is an estimated number not derived from anywhere. it is partially based on historical cash balance and funds required for retailers to run their business. Read More