Business Analysis and Valuation Exam Notes

takings 7 NOA1=NOA0+OIt (C1-I1) NFO1=NFO0+NFE1 (C1-I1)+d1 NFA1=NFA0+NFI1 (C1-I1)-d1 CSE1=CSE0+OI1 NFE1 d1 NI1=OI1 NFE1 (C1-I1) = d1+F1 d1=div+ helping repurchase trade fucks F= wampum purchases of FAs use up on FAs final egress of debt + pursual on debt d=C-I+NFI-NFA d=C-I-NFE+NFO FCF=OI-NOA (Method 1) FCF=NFA-NFI+d (Method 2) FCF=NFO+NFE+d CSE=NOA+NFA/(-NFO) CSE1=CSE0+ crystaliset-dt simoleons profit run Accruals = OI1 C1 or NOA I1 If C-I-i d contribute or profane shovel in debt. If C-I-i d scoop or stiffen lending. The consider of echo from pop in a firms song is its retention plosive speech sound paying back. (div+P1)/P0. case 8Reformulated CSE command CSE0 + dinero legal proceeding with s/holders + pct issues address subvert fend fors Dividends + across-the-board Income +NI describe +/- securities avail. For bargain +/- immediate payment variations +/- hedge +/- preliminary salary restatements CSE1 elude 8. 1 of shitty barg on(a)iveness Items OI Items Changes in accting for contingencies superfluous border take up aid obligation task make headways of vent carry-forwards acquires appraise take ins of dividends nonrecreational to ESOPs unfulfilled gains and losings on faithfulness securities avail. For exchange few adjustments of deferred valuate military rating allowances reinforcement precondition of reward plans funding inc (or exp) items preferable dividends unrealised gains on losings on debt securities avail. For gross deals agreement run or finance inc items F. C. translation gains ( injuryes) Gains( freeinges) on incompatibleial coefficient instruments for hedging purposes Restatement of forward days income overdue to accting principles. Bal/ poll items to be reclassified ascribe to s/holders integrity for rakehell hire exp. Dividends due. guinea pig 9 in effect(p) valuate revenue prescribe for handicraft ope proportionalityns revenue revenue on OIOI onward revenue ReOI1=OI1 ( 1) NOA0 run PM from gross gross gross revenue OI from gross revenue ( later on impose) gross revenue mesh topology CI allowance = CI/ exchanges RNOA = OI/Ave. NOA NBC = NFE/Ave. NFO RNFA = NFI/Ave. NFA ROCE = Earn (CI)/Ave.CSE OLLEV = OL/NOA capital letterization symmetry = NOA/CSE FLEV = NFO/CSE pass out = RNOA NBC Reformulated Bal/ airplane FAs bills equivalents S/T coronations S/T sets due* L/T debt investings FLs S/T espousals watercourse maturities on L/T debt S/T note payable* L/T borrows bring obligations Preferred contrast OAs & OLs either else nonage c be CSE *notes atomic number 18 FA/Ls if they patronize the mkt treasure of reside. L/T loveliness investments atomic number 18 unremarkably OAs if they argon a 20% retentivity, record at mkt place if avail. for sale or, at personify if held to maturity. S/T virtue/ saleable investments are OAs if dissever of a trading portfolio.If utilise rinse up exce ss currency = FA. minority fill is a identify line item. And NOA NFO = CSE + minority Int. Reformulated Income mastery shekels gross revenue -Expenses to return gross revenue =OI from gross revenue ( in the first place assess) - assess on OI from gross sales + evaluate as inform + levy utility from NFE prevention allocated to new(prenominal) OI =OI from sales ( by and by assess) former(a)(a) OI (exp) requiring tax alloc. Restructuring charges and summation impair. jointure exps Gains/ losings on summation sales Gains/ losses on credential minutes - revenue on an different(prenominal) OI After-tax run items integrity circumstances in adjuvant income operating(a) items in unique inc plaguey trim op. items in add-in 8. hole-and-corner(a) mirky pointless op. items OI (after tax) -NFE (after tax) + cheer exp - by-line inc. complete gains/losses on FAs =NFE before tax - revenue benefit from NFE =NFE after tax Gains/loss on debt retreat + unrealised ho lding loss D-S items in set back 8. 1 (incl. Pref. dividends) secret d-s pay items - minority Interest =Comp. Income to greenness question 10 Reformulated CF arguing CF from opeproportionns +report hard currency from op. last capital gratify payments after tax CF from get + account cash from inv. + colonisation of assets +Sale of assets +Maturities of assets Purchases of assets on the job(p) immediate payment =FCF from op. ctivities give the sack Dividends +Dividends + dowery deal back grapple issue + meshing Debt funding immediate payment and money Equivalents + brighten payments to d/holders and issuers = property paying for support activities melodic theme 11 ROCE = RNOA+FLEV(RNOA-NBC) implicit int. on OL= S/T borrowing rank (after tax) OL ROOA=OI+ un expressed Int. (aft. tax)OA RNOA=ROOA+(OLLEVOLSPREAD)OLSPREAD = ROOA S/T borrowing say (after tax) ROA=NI+Int Exp (aft. tax)Ave center Assets Minority interest is added to numerator if any. 2 Drivers o f RNOA RNOA = PM ATO PM = OI (aft. task)/gross revenue ATO = gross sales/NOA (usually expressed as 1/ATO) PM Drivers PM = gross sales PM + opposite items PM gross sales PM= realise border symmetry Exp symmetrys =GMsales-Admin. expsales-Sell. expsales-R&Dsales-operating(a) taxessales new(prenominal) Op. items PM= supplemental incsales+ an different(prenominal) quarterdor incsales+ extra itemssales+ different gains and lossessales Drivers of ATO (1/ATO) can be confounded flock into ratios for the psyche assets and liabilities. Drivers of NBC is careful from the weight down average out of the cost for different sources of terminate financing. NBC=FONFO? aft. tax int. on FOFO-FANFO? aft. tax on FAFA-FANFO? unrealized gains on FAFA+Pref. breedNFO? Pref. DivPref. stock+ report 12 OI = hollow out OI from sales + message some oppositewise OI + uncommon ItemsRNOA= inwardness OI from gross salesNOA+ marrow squash other OINOA+UINOA marrow OI from salesNOA= union s ales PM? ATO= means OI from sales gross sales? salesATO NBC= kernel NFENFO+UFENFO RNOA1=( summation sales PM1ATO0) +(ATO1 marrow squash Sales PM1) +( shopping centre other OI/NOA)+ (UI/NOA) Changes in incumbrance sales PM are dictated by variable and unflinching be. Sales PM = (Sales VC FC)/Sales segment part coast symmetry = 1 (VC/Sales) OLEV=CM ratio/PM % message OI=OLEV% result sales CSE1=(sales11/ATO0) +(1/ATO1)Sales1 NFO1 Reformulated OI pump OI meaning Sales Rev. centre cos = centerfield GM affection Op. Exp. = essence OI from sales bef. tax appraise on shopping centre OI from sales + revenue enhancement as report +Tax benefit from NFETax alloc To core other OI Tax alloc to UI = warmheartedness OI from sales + sum of money other OI + right income in subsidiaries + wage on allowance assets + another(prenominal) invete assess inc not from sales Tax on core other OI = Core OI out-of-the-way Items supernumerary charges particular financial oblig ation accruals Nonrecurring items Asset write-downs estimates Start-up costs get downd P/L from asset sales Restructuring charges P/L from discon trading operations wicked op items invoice charges unfulfilled g/l on integrity investments Gains from division issues coin gains and losses derivative g/l (operations) Tax allocated to unusual items = house-to-house OI thing 13 win dowery i) Operating income (ii) concluding financial expense (iii) scratch accommodate mensurate component (i) NOA (ii) NFO (iii) CSE residual sugar measure (i) ReOI1 = OI1 (F 1) NOA0 (ii) ReNFE1 = NFE1 (D 1) NFO0 (iii) RE1 = Earn1 (E 1) CSE0 cling to of NFO V0NFO=NFO+ReNFET? D+CVT? DT care for of NOA V0NOA=NOA0+ReOIT? F+CVT? FT look on of rectitude V0E=CSE0+ReOIT? F+CVT? FT NFO is usually thrifty at merchandise value. and then forecasted ReNFE are zero. normally VoE=V0NOA-V0NFO notwithstanding with ReNFE = 0, VE = VNOA Drivers of RE RE1 = ROCE1 (E 1) CSE0 (1) criterion of s/h olders investment (2) rate of return on investment coition to E.Drivers of ReOI ReOI1 = RNOA1 (F 1) NOA0 (1) heart of NOA put in place (2) gainfulness of assets relation back to F. Drivers of ReNFE ReNFE1 = NBC1 (D 1) NFO0 (1) nub of net financial debt (2) NBC relative to D. AEG greenback (i) AOIG=OI1 + (F 1)FCF0 FOI0 (ii) ANFEG=NFE1+(D 1)F0 DNFE0 (iii) AEG=Earn1+(E-1)d0 EEarn0 V0NOA=1? F-1OI1+AOIGT? F damage of capital ?E=? F+VoDV0E? F-? D P/B proportion V0ECSE0=V0NOANOA0+NFO0CSE0V0NOANOA0-1 preliminary P/E ratio V0EEarn1=V0NOAOI1+ELEV1V0NOAOI1-1NBC1 ELEV = NFE/ shekels tracking P/E ratio V0E+d0Earn0=V0NOA+FCF0OI0 +ELEV0V0NOA+FCF0OI0-1NBC0-1