Posts by: WST Expert 1
Re: Circular reference calculation not refrehsing automatically
Hi, you've violated rule #1 in modeling: No circular references! As we teach in our financial modeling courses, for debt and leases calculations that require a circ, build in a switch for beginning balance (no circ) vs average balance. this is covered extensively in our debt sweep modeling of our ... Read More
Hi, you've violated rule #1 in modeling: No circular references! As we teach in our financial modeling courses, for debt and leases calculations that require a circ, build in a switch for beginning balance (no circ) vs average balance. this is covered extensively in our debt sweep modeling of our ... Read More
RE: Explain 338(h)10 elections and the impact on a M&A deal.
In a 338(h)(10) election, the transaction is a stock acquisition from a legal perspective but is treated like an asset sale for tax purposes. Thus, the acquiror can depreciate/amortize the full purchase price and experience a step-up in tax basis. The acquiror can also utilize any NOLs to shelter ag... Read More
In a 338(h)(10) election, the transaction is a stock acquisition from a legal perspective but is treated like an asset sale for tax purposes. Thus, the acquiror can depreciate/amortize the full purchase price and experience a step-up in tax basis. The acquiror can also utilize any NOLs to shelter ag... Read More
RE: Quick SGA question from basic accretion/dilution model
There can be estimates for SG&A if you dig through the research analysts reports and some estimates collection services (ie, I/B/E/S, First Call, Bloomberg, etc) do track that. However, you question is in the wrong direction altogether. Even if we had the number (very possible and easy to get... Read More
There can be estimates for SG&A if you dig through the research analysts reports and some estimates collection services (ie, I/B/E/S, First Call, Bloomberg, etc) do track that. However, you question is in the wrong direction altogether. Even if we had the number (very possible and easy to get... Read More
Re: How to model for existing revolver
We would actually recommend using the same facility, so that your existing revolver balance is the beginning balance of your revolver on the model.This way, any "excess cash" generated can be used to pay off the old revolver balance as well. Turning the existing revolver into a term loan w... Read More
We would actually recommend using the same facility, so that your existing revolver balance is the beginning balance of your revolver on the model.This way, any "excess cash" generated can be used to pay off the old revolver balance as well. Turning the existing revolver into a term loan w... Read More
RE: Explain the difference between Stock vs Asset deals.
In a stock sale, the acquiror purchases the stock of the Company, thus purchasing the entire company (all of the assets, liabilities and future contingencies). In an asset sale, the buyer only purchases certain assets and liabilities of the target company. Thus, in an asset sale, the acquiror is not... Read More
In a stock sale, the acquiror purchases the stock of the Company, thus purchasing the entire company (all of the assets, liabilities and future contingencies). In an asset sale, the buyer only purchases certain assets and liabilities of the target company. Thus, in an asset sale, the acquiror is not... Read More
RE: AFM Core Model: Common stock is held constant, APIC is...
Correct, we assume that "common stock" on the BS, which is par value, doesn't change or changes so minimally we don't care about allocating it. This applies for new issuances as well as any stock repurchases. As financial analysts, we don't really care about the difference - accountants do for bookk... Read More
Correct, we assume that "common stock" on the BS, which is par value, doesn't change or changes so minimally we don't care about allocating it. This applies for new issuances as well as any stock repurchases. As financial analysts, we don't really care about the difference - accountants do for bookk... Read More
RE: Multiples & WACC class
1) To be technical, correct, the Debt figures for WACC should NOT include MI. Your logic in your question is 100% dead on. Honestly, we got lazy. 2) They really should match - however, the best practice is actually to just use 40% for beta as well - you'll see that on most of Wall Street's models... Read More
1) To be technical, correct, the Debt figures for WACC should NOT include MI. Your logic in your question is 100% dead on. Honestly, we got lazy. 2) They really should match - however, the best practice is actually to just use 40% for beta as well - you'll see that on most of Wall Street's models... Read More
Re: Intermed-Adv merger model
On Merger tab, the inputs come from acquiror standalone.
The two standalone target and acquiror tax rate is from the footnotes and the interest expense $ amount is from the IS. We kept it constant since we didn't build the full standalone core models for the target and acquiror.
On Merger tab, the inputs come from acquiror standalone.
The two standalone target and acquiror tax rate is from the footnotes and the interest expense $ amount is from the IS. We kept it constant since we didn't build the full standalone core models for the target and acquiror.
RE: How to u treat of amortization of intangibles and taxation?
In a plain vanilla stock deal, the Acquiror is not able to amortize the goodwill (excess of equity purchase price over book value). In an asset purchase, the Acquiror is able to depreciate/amortize the newly acquired assets which lowers the Acquiror’s Taxable Income. In a 338(h)(10) election, a St... Read More
In a plain vanilla stock deal, the Acquiror is not able to amortize the goodwill (excess of equity purchase price over book value). In an asset purchase, the Acquiror is able to depreciate/amortize the newly acquired assets which lowers the Acquiror’s Taxable Income. In a 338(h)(10) election, a St... Read More
Correct: for the most part, assets are valued at cost but this valuation framework is undergoing change with both the FASB and IASB pushing firms to move to market value accounting. At present MV is limited to financial instruments.