Re: Cannot FULLY use WSTMacros3.4.2.xla on Excel 2013
Just to check - you are hitting ALT+X and then the letter S after the Add-ins ribbon appears. If so, when you hit ALT+X, does the "WST" sub-menu show up within the Add-ins menu? If WST doesn't show up, then the macros were not correctly installed. If WST does show up, are there any other ... Just to check - you are hitting ALT+X and then the letter S after the Add-ins ribbon appears.

If so, when you hit ALT+X, does the "WST" sub-menu show up within the Add-ins menu?
If WST doesn't show up, then the macros were not correctly installed.
If WST does show up, are there any other macros in the Add-ins menu?

When you hit ALT+X and you see WST, make note of what letter is highlighted. Sometimes if you have additional macros installed that have also assigned "S" as the "accelerator" key, then it might be S1 or S2, etc.

Let us know if you still have problems and we can troubleshoot further.
Thank you. Read More

RE: How do I treat Deferred Maintenance Revenues in TEV?
This is definitelty akin to deferred revenue and unearned revenue (ie magazine subscriptions). Thus, not to be part of TEV and so the same answer - don't add or subtract. In the case of a merger, we would normally treat this as a closing adjustment due to working capital - that is, the buyer req... This is definitelty akin to deferred revenue and unearned revenue (ie magazine subscriptions). Thus, not to be part of TEV and so the same answer - don't add or subtract.

In the case of a merger, we would normally treat this as a closing adjustment due to working capital - that is, the buyer requires a minimum working capital of say, 60 days operating expenses. Any shortfall is a one-to-one deduct from price and any excess is a one-to-one increase to price.

However, one could argue that if this is a significant materially large number, it wouldn't be unreasonable for the buyer to ask for the revenue for that since according to accrual accounting, the existing owner shouldn't have spent it. That's a separate negotiation for working capital, but again, in our opinion is not a TEV adjustment. Since TEV doesn't include working capital shortfalls, its not "officially" part of TEV although it does affect purchase price as stated above.

As for revenue recognition and early invoicing - that's not GAAP and if it were publicly traded, the auditors would never let them get away with it, at least not today. Think back to dotcom bubble and all the restatements. Revenue recognition according to GAAP says "service performed" and "collected/collectible". If customer never agrees to renewal, then its not collectible. Read More

Re: Array formula
Yes, any mathematical operator can be applied to the array function. Recall the array just allows you to simplify repetitive actions that you are doing a bunch of cells in Excel. So for instance taking the same example: Cell V11 : { =PRODUCT(1+T11:T32)-1} instead of -1 at the end you could do your ... Yes, any mathematical operator can be applied to the array function. Recall the array just allows you to simplify repetitive actions that you are doing a bunch of cells in Excel. So for instance taking the same example:
Cell V11 : { =PRODUCT(1+T11:T32)-1}

instead of -1 at the end you could do your * 0.5, so the formula would be:
Cell V11 : { =PRODUCT(1+T11:T32)*0.5}

It would first add one to each individual cell, then take the produc tof all those outputs and then multiple by 0.5
Not sure why your result is always -1, could be that you have a syntax error.

Try this: type in exactly
=PRODUCT(1+T11:T32)*0.5
then hit Ctrl+Shift+Enter

Let us know if that worked! Read More

Re: GAAP or cash
if your projections need to be solid, why are you using analyst projections?
LBO analyses are primarily dependent on sensitivity analysis and case scenarios, particularly worse case scenarios and building data tables to see debt paydown and IRRs under stressful revenue and cash flow assumptions.

RE: How do you factor net operating losses (NOLs) in valuation?
The way we would account for NOLs in a DCF analysis is to reduce the "cash taxes" paid, thereby increasing Free Cash Flow to Firm and thus, increasing the PV of FCFF in the 4-5 year projection period. If there are significant NOLs still remaining after that, we would treat the PV of the tax shields ... The way we would account for NOLs in a DCF analysis is to reduce the "cash taxes" paid, thereby increasing Free Cash Flow to Firm and thus, increasing the PV of FCFF in the 4-5 year projection period. If there are significant NOLs still remaining after that, we would treat the PV of the tax shields as if it were cash, so it would affect the Net Debt calculation and thus, Equity Value, but not Enterprise Value. In short, the question of which discount rate to use (WACC or Ke) is not required. Logic: if you have two companies that are exactly the same and generates the exact same future cash flows, except one has NOLs and one doesn't, the overall value of the firm is still the same - only the equity value is affected => meaning that if you were absolutely certain the NOLs would be utilized, it is like having cash in your pocket and so, Equity Value is increased (source of funds) but not Enterprise Value. Read More