Red Book

What is wokring capital? - Formula

CA-CL

Why rise in accounts recevable cash reduction on CFS?

CFS starts with net income and net income capturing all of revenue of company (as opposed to just cash revenue) = rise in AR = more customers paying on credit during said period - cash not paid hence downward adjustment

What are leverage ratio?

Comparing q. of debt held by company to marticular CF metric e.g. total debt/EBITDA

Which section of the CFS capturing interest expensie? - do you remember? - Eval

Does not capturing - Since ineteres expensse recognised on IS = indirectly captured in CFO section

Operating working capital?

Excludes cash and debt (AR + Inventory +Prepaid exp) - (AP +Accrued exp + deferred revenue)

What doea change in NWC inform you re CF of firm? - Important metric - bell curve from Branson (interest growing and growoing)

Giving sense of how much CF of company will devaite from net income (accural based)

What does asset turnover ratio measure? - Casson diagram = laura running on oil Kroll - Kroll/mean

How efficiently company utilises assets to generate saels = Revenue/ (average of beginning and endnig total assets)

How are three fin statements connected? - Top two: - Branson Bottom two: - deer triangle to fuel for engine - 1) back or Zuck - 2) Factory - 3) Yellen - important First and last: - 1) Cash in bank: before + branson - TEck control of coal - cream two times - Factories by gobbling up

IS and CFS: - net income top of CFS How CFS linked to BS and vice versa: - CF tracking changes of NWC on BS - Impact of: a) D or E issuarnces b) PP&E c) share buybacks (treas stock) also on BS refectied - ending cash balance bottom CFS flows to BS How IS to BS linked: - retained earnings: - Current RE = Retained earnings prior period + + net income - dividends issued during prev period - i/r on IS calculated on basis of ending and beginning debt balances on bS - PP&E balance by D&A refuced = expense on IS

Three fin statments after dividend issued?

IS: Nonne CFS: cash from financing lower BS: CAsh declines = retained earnings declines

Where can find fin reports on public firms? - Strugar

SEC EDGAR

Difference between write down + write off? - Triangle= laura = due to brain damage PJ child

Write down = adustment being made to asset e.g. PPE/ inventory, which is imapred Write off = reducing value of asset to zero

REgulatory assigns to insit = Mind the - no lumps - World is - Safeguard Purpose of GAAP? - no favourtism - you and not 'f*cking up'

Context: - in US, SEC authorises Financial Accounting Standards Board (FASB) to determine set of accounting rules which public companies follow According to FASB, fin statements required prepared according to Generally Accepted Accounting Principles (US GAAP) All stattements prepared in: - a) consistent b) fair basis S.t. interests of lenders and investors = protected

What are liquidity ratios + example? - Shariz robsinsons Nat schools when rowing Ryan keylly = Robinson's laura - black fruit type

Assess ability of company to meet current obligations utilising current assets - current ratio

Example when current ratio misleading? - cash too much - Real estate?

Cash balance including minimum cash amount necessary for working cap needs = operations could not continue if cash falls below said level SR investmnets whcih woudl not have been liquidated easily in markets may be included

Reasoning behind conservatism principle in accural accoutning? - when crossing road what Mum advises - Bezos principle to below

Caution + thorough verification required by acountats when preparing financial statements = downward bias

Difference between up round vs douwn round

up round = financing in which valuation of fim raises vs previous valuatiion Down round = valualtion falls post financing round

Which types of assets amortised? - Happy bday, e.g.

INtangible = trademarkets e.g

Walk me through three fin statements? - MR-MR = David - Branson - Next = photo = laura and money - Money = free kick = bottom = no funds = first - second and third - Branson change

IS = profitability over certain period (quarterly/ annually) - begins with revenue - ends net income BS = snapshot of resources (assets) and funding sources (L+E) CFS = in indirect approach, = starting line = net icnome = adjusted w/ non-cash items e.g. changes NWC and D&A = CFO - Adding cash from investing and cash from financing = net change in cash = actual outflows/inflows

What is goodwill + how created? - IP example of this - Jessie J over Solomon Cucmber football of Branson Laura

Intangible asset = capturing excess of purchase price over fair market value of fair market value of net assets of a business

Income statement and cash; which choose? - POV: Nicole or VC - important = cash + not Michael Anscomb parent nerd meetings within unaesthetic word - interested: sufficient imp = i) Dad idea into engine ii) large back debt = #1 Settle: - MR>MC, - Startup what valuation? - Lower Bentham: Branson, Engine cash, Valuation DCF below water lie

Perspective: - if both, lender or euqity investor CF = reflecting true liquidity and not prone to discretionary accountiong concentions utilised in acural accounting Important since to both stakeholders, ability to generate adequate CF to a) reinvest into operations b) meet debt obligations = priority Eval: Depends on profitability - e.g. if company unprofitable = IS potentially more utility = valuation f(revenue mulriplke) - CFS of lower value if: - 1) net income 2) CFO 3) FCF all negative

Why most assets recorded at historical cost under accural? - Sam Ronaldo partner Heisenberg uncertainty

So-called historical cost principles suggesting that value of asset on BS must reflect its inital purchase price as opposed to currentmarket value

What is average cost method of inventory accoutning?] - Pratheeshan mean/what you cannot take from GS

Third most widely used for inevntory accoutning other than FIFO and LIFo - assiogned inventory costs = based on weighted average = total costs of production in period = summed up + divided by total no. items produced

If have BS, would you choose IS or CFS? - start of race - Tortoise wins

1) Assumption both beginning + end of period balances - Choose IS since ability to reconcile CF utilising BS changes YoY alongside IS

Best ways to calc EPS? - Starbucks Calcium zuck distinction vs merit mean - Robinson's mean - What euqity cannot be avoided: Taylor Axe Zuck - Denominator = mean Pratheeshan

1. Basic = (net income -dividends on preferred stock)/Basic Weighted average shares outstanding 2. Diluted = (net income -dividends on preferred stock)/diluted average shares outstanding

Why increasingly important to understand differences betwen US GAAP and IFTS? - 1. JHJ 2. In theory should have bowdler risk reduced 4. Essilor-Luxoticca

1. Globalisation 2. Investments' geographic diversificitaion 2. M&A cross border

What are two methods of revenue recognition for long-term projects? - Jay re video games = what Anastasia Steele and Grey sign

1. Percentage of completion method 2. Completed contract

Differences between 10-K and 10-Q? - 1. Broad of how firm functioning 2. Board game 3. Talkig management 4. Anscomb parents changed 5. Peyton 1. You in Prateeshan and Sam Winter 2. Additional 3. Talking 1. Anscomb Eton

10-K - annual report filed w/ SEC any public firm - full overview of ops - Risk factors - A commentary on perf recent - Changes accounting practices - Three core fin stats 10-Q = quarterly report also with SEC filed - 1. More condensed in a) depth 2) length - Brief supplementary disclosures - MD&A brief More differences - 10-K audited indep accounting - 10-Qs reviewed by CPAs only

Walk me through the BS? - Laura required to be paid for through L + E Laura: - in terms of ash: - First = can into important within 12 months - List - larger BA - Oscar in LR Amaar: - how close pregnant lady Voice/Exit Zuck: - me and you - Proceeds sale - Clawing back - Net cinome linked

A = Liabilities + Shareholders' Equity - Notion that assets which belong to a company must have been funded in some way or another Assets - organisation order of liquidity = CA = assets able of being converted into cash within one year - e.g. Cash, prepaid expenses, marketable securities - LTA e.g. goodwill, PPE, intangible , goodwill, long-term inv Liabilities: - Listen in order of how close to 'coming due' Shareholders' equity: - Common sotck - Additional paid-in capital (APIC), Treasury stock - Retained earnings

How to forecast working cap line items on BS? 1. Important not included 2, Kroll 3. warehouse 4. lights etc: accounting 5. `Marketable securities = kroll 6. Outlay potential = 7.lights: accounting 8. Kroll: 9. Residual: Kroll

A/R: Revenue in line Inventories: COGS in line Prepard exp: in line SG&A Ohter CA: Revenue in line AP: COGS Accrued exp: SG&A = operating expenseas Deferred revebnue = Revenue in line Other CL = revenue

Is land depreciated by companies? - large watch BA helper

Although LR asset = assumed indefinitie useful life hence no

More insight into what assets, liabilities + equity representing? - Oil price in neoclassical vended or yield non-negative and non 0 cash +ve - cash safe cash; shovel dig holes - next: IOU to EmployAbiity = funds source in order to fund shovels - e.g. to LineUp sup/ - Important leaving in future Sharheolders: funds into firm + bleeding dangerous paying for laura

Assets = resources of econ value which can be sold/ provide +ve monetary benefits - e.g. marketable securities = store of monetary value amd PP&E utilised for Cf generation in future LIabilities = obligations unsettled to another party = external source of capital from third parties aiding to finance a company's assets - e.g. payments owed to vendors/ suppliers/ debt capital - future cash outflows Euqity = capital which is invested into business = representing internal sources of capital aided to fund assets - providers of capital may be e,.g .self funded or outsude instit investors

Why IS insufficient assess company's liquidity? - Phonics of word not pleasant for some reason - Michael in debt

Broader: potentially misleading of 'health' of firm from both 1) solvency 2) liquidity persoectuve 2) e.g. net income may be consistently positive yet struggling sales on credit. = not reflected on IS Other: fin reporting accural conventions imperpect since relying on discretion of management: - said so-called wiggle room = raises risk of 'earnings management' + misleading portrayal of operational performance Partial remedy IS shortcomings = CFS - reconciling net income predicated on

Main sections of 10-K? - Where you store iCloud passwords First: - Pets , toys - Eye over firm - Lap fance - coutnries - Fresnilo - Board game M&DA: - IMO governement balance 12 months

Business overview - divisions - service/prod offering - strategy -geo footprint - seasonability - risks MD&A - analaysis of fiscal-year result of firm from management's perspective Fin statements: - Core three: IS, BS, CFS - Other : Statement Comp Income (other comprehensive income = unrealised gains + losses on assets not reflected in income statements = investments in multiple countries e.g. accrued gains or losses from retirement/pension programmes) , Statement of Shareholders' Equity Notes: - Supp disclosures = more info re fin. performance

LIne items on BS? - CA: - full recently Daniel Radcliffe comment = Johnson or Samarkand origin - Treasuries - Ash into important - Heretofore - McMahon -WIP or ore - - Lights are current - Factories - Bob the builder role delivery or production - IP - non touching laura - Brand - Not tactile laura = paid - Williams as house master CL: - No one had these Eton - lights - salaries December example - small back - within calendar NCL: - M&A writeoff potentially - either - Zachius -Mismatch = paid and FIG - BA large watch large back - greater year - Storefront - large watch Goeff specialisse = own machine for certain time = outloay in exchange; running engine (op vs cap) E: - No gown - Harrow - (issue price-par value)*No - Zuck share classes - Prius = large back too - Yellen - clawed back - Net income - Fiscal can occur - tobacco - Not grammar or private - Yen or Lira + did not know muscles large

CA CACE - Including cash-like highly liquid investments e.g. short-term government bonds and commercial paper (SR DEBT UTILISED BY corps to finance libailites SR e.g. payroll) Marketable sec - SR equity or debt securities which would be liquidated into cash rather swiftly AR - Paymetns which customers of a business owe to it for service already provided Inventories - unfunished goods/ rae mats +finished goods = waiting to be sold + direct costs linked to producing said goods prepaid exp - insurance, utilities and rent NCA PPE - Notably fixed assets e.g. buildings, land, machinery utlise to provide/ manufacture products services Intangibles - (Acquired) non-physical assets e.g. trademarks Goodwill - intangible asset created capture difference: purchase price - fair market value (FMV) of an asset acquired Liabilities CL AP - unpaid bills to vendors/ suppliers which were obtained yet paid for on credit Accrued Exp - expenses incurred e.g. utiilities or employee comp yet not paid = invoice not received (e.g. contract starts end of Dec and employees paid bi-weekly; although cash comp received in Jan, 'work' associated with payment completed in Dec = recognised as an accrued expense in Dec eventhough cash not disbursed) SR debt - Debt payments whcih are due with 12 months - current portion of LR debt included as well NCL DEferreed revenue - revenue not earned which has been received in advanced of g/s delivered to customer (C or Non C) Deferred taxes - tax expense which is recognised under GAAP yet not paid as a result of temp timing differences between tax and book accounting LTD - maturity exceeds one year Lease obligations - contractual agreements (LR) which allow firm to lease PP&E for certain time as an exchnage for a set of regular payments - relating to operating leases rather than capital leases = PV of lease payments as asset on BS (D&A on IS) Equity Common stock - an ownership share can be issued when raising capital from external investors in exchange = equity Additional Paid-in capital - q. received over par value from sale of common/preferred stock Preferred stock - equity form considered habitually as a hybrid investment = features of both debt and common stock - participating and convertible Treasury stock - shares issued previoulsy yet repurchased by firm Retained earnings/ 'accumulated deficit' - cumulate q. of earnings since formation of firm -diviends Other comprehensive income - adjustments due to foreign-currency translations or unrealised gains/losses on available for-sale securities

What is sharehodlers' equity? - shovel buffet firm = bleeding of this type dangeroups LBO stage two shovel = laura

Capital invested into business = representing internal sources of capital helping fund assets

More imp, IS or CFS? 1) Aubrey 2) together brining two ideas = unaesthetic word w/ important - highlights ash + large muscles + Dad not mask underwater on first = unaethetic

Caveat: - both required for in-depth analysis CF more signif: reconciling net income = which is the accrual-based bottom line on IS, to what hapens in cash CFS bringing attention to issues liqudity related + I and F activities which not visible on IS = accrual based

What are Solvency/leverage ratios + example? - Ryan Kelley large back/ zuck/laura/ net income/ fr = Shariz large back rowing Nat schools - not including cash SSE/Warren not fan

Comparing company's use of debt vs equity/assets/earnings/total cap to evaliation whether possible to meet debt obligations = - Debt to EBTIDA

What is going concern assumption in accural accoutning>

Continue operating into forseeable future + indefinitiely remain in existence

Define contra-liability, contra- asset, contra equity + examples of each? - Negative seemingly bank w/ type of card you have: Dad in transaction: car eaten away but for intangible - Laura baby in hands type of card you do not have: eating car since eating cars - POsitive: positive: down q. of zuck cash by firm: e,g, Yellen

Contra liab = liability account which carrying debit balance = financing fees in M&A = amortised over maturity of debt = reducing annual tax burden Contra asset = asset carrying credit balance = depreciation = reducing carrying balance of fixed asset yet providing tax benefits Contra equity account = debit balance + reduces total q. equity held by company = q. shares repurchased from open market - e,g, treasuriy stock = reduction of sharehodlers' equity

Takeaways from Biden tax plans? - 7x3 to 7x4

Corporate rat rises 21 to 28%

What are deferred tax liabilities? - George does not small talk like, mind the .... first = not Zachius - Giulia handed over cash

Created when company recognised tax on GAAP IS but due to timing difference between GAAP + IRS accounting = not paid to IRS = expected pain in future

Difference between current ratio and quick ratio? - formula = robinsons/robinson's = ash = if Ash Dad peak male + small watch what you needed to do when joining rowing - QUick = small watch Ash = whipping if disobey Ash laura? - imp (similar) + what turning into R soon + small watch oscar guy/ Amaar

Current ratio = current assets/ current liabilites = liquidity financially healthy and can meet short-term obligations quick ratio = also measurement of short-term liquidity yet more strict about what is liquid asset = CACE + AR + Short-term inv/ CL

How to forecast capex or D&A? - krloll tpp

D&A = % of revenue or capex capex = % reveue

WHich ratios would you examine to assess working capital managemnt effciency? - 1. warehosue 2. Kroll 3. Suppliers Calc: 1. stockpiles 2. Ar 3. oil in congo

Days inventory held = (inventory/COGS)*365 Days Sales outstanding = (AR/revenue)*365 Days Payable outstanding = (AP/COGS)*365

Why dereffred revenue liability and accounts reciable as asset?

Deferred revenue: Has unfilled obligations to customers who paid in advance Accounts receivable: already relivered = all remains is the collection of paumetns

What is allowance for doubtful accounts on BS? - ball park share = not Yu Gi OH, linked to revenue

ESTIMATING % of uncollectible accounts receivble

Why is effective + marginal tax rate different oftne? - compound accumulating - chasm income Zachius + income Zachius what you must submit each Jan

Effective tax calc utilising pre-tax income from accrual-based IS - given difference between taxable income on IS + taxable income on tax filing

Difference between effective + marginal tax rates? - zachius/ penultimate line

Effective: taxes paid/eBT = percentage of taxable income corp required to pay in tax Marginal tax rate = taxation percentrage on the last dollar of taxable income

Difference between maintenance and growth capex? - latter = hand on wheel by Michael Michael Burry inflationary new balloon expansion for future -It's hard, ...., it's worth it = Ronaldo partner = Caroline found endearing carry on EBIT Robinston's Italy 1871

Growth = discretionary spending to faciliate nbovel growth plants = e.g. acquire new customes Maintennce = necessary expenditures to continue operating within current state

What is ROIC utilised to meausure? - Casson Michael chara of competitive equilibrium charity shovel - On way to FCF calaculation/ buffel shovel

How efficient managemnt team at allopcating capital - ROIC = NOPAT/INvested capita;l

What does inventory turnover measure and how does it differ from DIH? - you with David warehouse - oil in congo/warehouse/2) - three inches warehouse to Kroll

How often company sold/replaced inventory balance in certain period = COGS/ (Average of beginning+ endning invetnory) DIH = average number of days taking for company to turn inventorty into revenue

Whar does accounts payables turnover measure + higher or lower prefereable? - calc: oil in congo/CL/2) - top is actual materialisation

How quickly company paying vendoers = longer = more flexiblity accounts payable turnoveer = COGS/ (Average beginning + ending accounts balance) - higher better = suppliers more pleased

What are two types of credit ratios utilised to assess default risk of company? - cream vs take this (in battlefield) - large debt

I/r coverage rato Leverage ratio

How would $100 inventory writedown impact three fin statements? - What kmpact of writedown (think D&A) = what type? - What type of expense? - Cash - value: other?

IS: $100 down operating income (different to reduction in inventory: net income down $60 CFS: Net income down $60 yet non-cash expense hence +$40 BS: $40-100 = -$60; -$60

How does selling a building with a book value of $6m for $10m impact three fin statements? - Account for both expense and price - CFS: how to account for what actually gain? Buffet? - BS: ow balance?

IS: Pre-tax income by $4m = rise $2.4m post tax CFS: $2.4m but $4m gain non cash hence subtracted in CFO; caash from investing (CFI) +$8.4 recogised BS:Cash up $8,4 yet bulding down 6 hence up $2.4; up $2.4m

How does buying a building impcat fin statemetns? -- PJT explain whywhich section - On important statement, consider - Over time

IS: no impact since capitalised CFS: Lower cash from investing on PP&E BS: cash down by purchase price; rise in PPE Remember to consider - how throughout useful life of prucahsed building, deprecaition recognised on IS Cash;

Discretionary managemnt decisions whcih could raise rasings? - Warehouse - Car parks not subject to rising sea levels - inflate on stock

LIFO to FIFO Not writing down imparied assts Share repurchase to reduce share count and raise EPS

What do phrases above line and below line meaning? - ed sheeran me nagging J big Slavonic vs train engine cross out in basket

LIne = operating income - dividing ongoing business = non-operational line items

Specific examples of why effective + marginal tax rates potentially differ? - car eaten up consistently vs tax US scared of = Ben 10 fast person - FIG car swallowing subdued vs Zachius swallowing car

MOst firms utilising straight line but IRS necessary accelerated depreciation = book depreciation lower than tax depreciation

Can companies amortise goodwill? - Not certain that education in your brain worrh it between train and platform

No = indefinite life under GAAP

Do accounts receivable get captured on IS? - Top line = brain time Mum not independent of improtant

No but does get captured indirectly in revenue - accural accoutning: revenue realised in period earned = whether cash received or not

When adjusting for non-recurring expenses, are litigation expenses always added back? - + shampoo/handbag

Not necessailty - degree to which expense non recurring depending on industry

How to calc retained earnings current period?

Prior retained earnings - dividends + net income

How can profitable firm = bankrupt? - 1. AR- Curves 2. Lions led by donkets = importnat Zachius task = should be in pocket pie expansion = ash 3. In important must 4. Suisse 5. Excessive large back

Profitable =revenues exceed expenses - if firm ineffective at cash collecton from customers = allowing receivables to baloon = liquidity issues - or not able to get terms favourable with suppliers = required to pay in cash for all supplies and inventories - firms with these forms of issues can often financing secure yet in credit crunch = 2008 = not - If profit firm = excessive debt take on = cannot service i/r = also defaulting

What does retention ratio represrnt + how related to dividend payout ratio? - how retained earnings calc idea?

Proportion of net income retained by company - retention ratio = (net income-dividends)/net income

How hsould increase in inventories addressed on CFS?

RIse in inventory = use of cash = outflow of cash from ops

What does return on assets and return on equity measure - Casson chart - FORMULA = BRANSON /(of end + 21sr SepT/2) - casson chart Michael Ryan to Kelley suck cash shovel - Brandson/ (FIG football zuck cash/2)

ROA = asset utilisitation + how efficientcy company's assets utilised to generate earnings = ROA = Net income/ (average of begining + ending total assets) Return on equity = how efficency managemt = utilissing shareholder captal = ROE = net income (Averegr of beginning + ending book value of equity)

How would share repurchase affect EPS? - important yielding?

Reducing share could hence raising EPS Eval: - share repurchase funded utiliseing excess cash = lower interest income = net income and EPS falls - counter eval: return on cash are low hence overall likely positive

Does company not incur any costs by paying employees via stock-based compensations as opposed to cash? - on CF + why explain - QE on existing funds holding

Stock-based comp= non-cash expense which reduces firm's taxable income + added back on CF Cost = creation of additional shares for existing equity owners = dilutive

Companies preferring staright line or accelereated dep?

Straight line = lower depreciation recorded earlier years

Relationship between depreciation + salvage-value asseumption? - - Warwick curve of laura

Straight line yearly depreciation = (historical cost of asset -salvage value)/ useful life

Role of fair-value accounting in mortgage crises? - Balls can do this in laura 1 or 0 binary one knocks down larger and larger - Friendship anywhere and and anywhere at all, Spas 12 = 100+50+7 = Steve Baum = App store automatic not Ash = Sacha padlocks = under writing Big short

Sudden drops in asset values potential to cause domino effect in market - FAs-157 required fin insits update procing of illiquid securities = writedowns -f CDS

How does relationship between depreciation and capesx shift as companies maturing - Greater shovel cash throwing out= car bite chunks larger = sellling shorts chiuld

The more company spent on capex in recent years = more depreciation comp incurs near term future

Relationships between ROA and ROE? - if large back: think about formula

Tied to leverage use - if no debt then two metrics = equal - ROE rises above ROA

WHat are shortcomings of ROA and ROE metrics for purposes of comparison? - Ronaldo not playing World up vs WAll in handbag/shampoo vs pie expansing

Usually benchmarked against competitors in identical industry vs would be useufl if comparison to peer group of firms similar growth rates

What is 8-K and when filed? - Charlie Pearson subject non-trivial Eleanor Roosevelt second tier = IPO burden

When company undergoing a materially significant event + necessary to disclose detausll

What is deferred tax asset?

When firm recognises tax expense on GAAP income statement yet due to timing difference between IRS and GAAP accounting rules = higher than what must be paid oin period e.g. if comapny reports pre=tax loss of $10m = not immedeately receiving tax refund =- carry forward lossses + applies against future profits

If a company issues $100 million in debt and uses $50 million to purchase new PP&E, walk me through how the three statements are impacted in the initial year of the purchase and at the end of year 1. Assume a 5% annual interest rate on the debt, no principal paydown, straight-line depreciation with a useful life of five years and no residual value, and a 40% tax rate. - Y0: - Capitaise

Year 0 IS: no change since capitalised rather than expensed CFS: Cash from investing less 50; cash from financing up by $100; change 50 BS: cash up 50 and PPE up 50; debt up 100 Year 1 IS: depreciation pf $10 and interest $5 hence pre-tax income down by $15m = 40% tax rrate = net income down $9 CFS: Add back depreciation hence net changr = +$1 BS: Cash up by $1m and PPE less $10; shareholders euqity down $9

How to calculate fixed charge coverage ratio + what meaning? - 35/36 if net cinome not varying = TAQA, Bill JPM/cream - Indep of cap stcutre + income = storefront phone on plane/(decucline + cream)

assess if earnings are able to cover fixed charges = utilities, rent + interest FCRR = (EBIT + Lease charges)/(Lease charges + interest expense

What are coverage ratios + example? - Comparisons to important; nat-schools liked (both cream and other) - Large back praying vs execution =important

gague of a company';s ability to sertve i'r payments as well as other debt'related obligations utilising a CF metric - Debt service coverage light blue

Arguement against using exit muluples approach in DCF?

DCF instrinc valuation method intended indepdnent of amret - relative valuation ghrought in

How to calculate control premium in M&A model>? - percentage rememebr - unit terms

(Offer price per share/ current share price -1)*100

What are IS adjustments related to a transaction? - shovelled Dad costs - Giulia term elderly chocolate buying - Ed Penney car eaten up - cream added and cream taken away

-Capitalised financed fees - Expected sysnergies - Incremential D&A - Loss interest income - Additional interest expense

How are earnouts structucred? - one hand - disrbursed apps now onto phone or laptop - share founded you were in third of these annum - share profits in future - yes or no

1-5 years and paid out in isntallments - %-based tiers for each yaer 1. Percentage of future performance 2. Binary payments

How to evaluate buy vs rent decision in NYC? - 1. Donkey = shovel sufficient not up handing = decade 2. Purhcase + lights/ Debt = market with cucumber mirror mallinkrodt expasnion = XIRR vs other 3. multples = absence shovel not down= payment rising momentum/value = cash toikling in suzck = hand-two more - board gamr Hannah = ASh less + large back vs S&P 500

1. Assumption = having sufficient upfront capital to make down payments + investment period 10 yrs + Option one . ASsume buy.+ pay monthly expenses = mortageg and then sell at price refleting historical growth rate = calc IRR and compare w/ renting . Option two: rental costs for comp propertoies estimate = rent escalations factor = no down payment = money at work in stock market = 5-7% long term Eval: more risky in property investment due to lower liquidity and leveerage vs sotck market

Flaws of regression betas? 1. IEA comment re Jennifer LAwrence film 2. variation BA watch as penis post ejac to stoxx vs S&P 2. Triangle ......: mean large back/ zuck cash vs robinsons

1. Backward looking: - estimate beta through regression model comparing historical market index returns to retunrs of company 2/ Standard error large since sensitive to index chosen 3. Capital structure constrant = averaged past D/E rather than current leverage

Two ways to determine the accreditve.dilutive impact of EPS? - innovation - final terms + mirror Penney cream, more zuck, Penney car swallowing pen Laura greater, chocolates elderly - merger top: kroll then Ronaldo partner, donkey handshake

1. Bottom up 2. Top down 1. Bottom up: starting with standalone EPS of buer and seller + adjusting to reflect incremental i/r expense . additional shares of issued, incremental D&A due to asset writeups, synergies 2. Two IS combined; revenue first and then to expenses, while making assumptions which are deal related

Two types of auction strucre in m&A? -1. Savova shoulders 2. Jemima commments ski trip you believed 1. Savova: Not PE: You dating = you vs Alec strong positive Zubair with fotball 2. specific: aubrey = FT books mo El Erian of cucumber purchasers = Mayowa = eye above Firm in past established

1. Broad auction 2. Targeted auction 1. Broad = sell-side bank reaching out to as many prosp. buyers as possible; competiiton directly correlation with valuation 2. Targeted; sell-side bank = shortlist of buyers; strong strategic fit already potentailly

Disadvantages of trading comps? 1. Bananas to pears 2. Brain football field ravine = gavel = no = gavel = nut november 3. 11m^3 1kg hydrogen subdued = not mirror integral football

1. COmparison can be argued to be apples to oranges 2. Comprehending valuation gaps between company +comparables involving judgement = challenging 3. volumes lwow not reflecting true fundam value

Why may shareholders prefer cash rather than stock? - factory vs value of broad + football Vere admission into Oxford after library donanted

1. Cash tangible + value post closing guaranteed

Impact of 2017 tax refom on PE 1. 7x5 to legal drinking age US 2. cream lessened lower

1. Corp tax reduction from 35% to 21% 2. Limits as to q. interest expenses can be deducated for tax prupsoses

Risks when assessing invest opportunities? - 1. Ducks can be this in grooming pet robinson's 2. Kondratiev 3. Worker/duck: Energy society not case 4. football greater transitory

1. Customer concentration 2. Cyclicality of intrysy 3. Employee/ Cysomer churn 4. Whether valuations termporarliy inflation

Drawbacks of DDM? - 1. Appropriate for Brandi Love of size w/ not you with distinctions field and .... at Iffley running NextEra importnatn = arduous binoculars 2. Not tobacco

1. DDM more suitable for mature large companies with consistent track record of paying out dividends = challenging to forecast 2. Most companies not paying dividends

Why do companies still enagge in M&A if a high percentage of deaals destroying sharehodler value? 1. Handshake Virgil Van Dijk = shield pie chart: lightbulb

1. Deals defensive to protect market share - staying innovative

Relationshio between debt and purchase price? 1. Individual 2. Other

1. Debt use allows PE firm to purcahse firms of particular size it could not with equity 2. More unused capital = dry powder for other investmetns

What is accounting treatment of financing fees? 1. TT - Michelle 1. Pac man large back to Dad swallowing, = shovel + paying down - Marsden key + key derivative of this lower through Welch favourite abbreviation opposite of lending

1. Explain 2. When When acquirer borrowing debt to finance acquisition, fees related to borrowing not treated like transaction fees - instead, capitalised + amortised over life of debt issuance - pro-forma EPS + net income reduced over term of borrowig

For purposes of forecasting, do you utilise effective/marginal tax rate? - Zachius marghin donkey = zachius % Giuliua capex maintenance - Who is on top? - donkey on once risk taken into account

1. Explain what 2. Which more effective Important because of tax-rate assumption = tax rate which is paid into perpetuity - effective tax rate habitulaly lower than marginal tax rate - recommended historical and base near-term tax-rate assumptions on effective tax raet

Why is control premium paid in M&A? - Michelle how would answer question: x axis economics handing over cash over buy and sell cucmbers Tom, Rupert, Anara football of equities = CArrot Zuck cash

1. Explain what it is 2. Why paid Def: q/ acquirer pauoing over market trading value of shares = necessary for incentivising shareholders exisiting to sell shares

HOw does coupon on bond differ from yield? - costs type - yearly i/r on notes taking head master of not loan - bingo deflated buying jessie J

1. Fixed vs varied Coupon = annual interest paid which is based on notional principal of bond Yield = annual return on bond =includes the coupon paumet adjusted for discount/ premium of purchase price when it is held to maturjnity

If 80% of valution from TV, what should be done?? - second = Sky diver donkey not mirror expansion balloon you not mentally

1. Forecast period extended (5-10 years) as in final year, normalied/stable growth should have been reached 2. Change TV assumptions may not reflect growth stable

HOw can founders maintain control of firm post iPO? - 1. What used to heat home chasm E.P. Thomapas of zuck = two what you are looking for equity social - Jamie walker = democracy kian/ lefts - Cocaine vs marijuana 2. ****ing taylor mason 5% short position in rocket company 3. fancy dinners $1,000 = Evan, Jacobelli, Toby, Alfred Backhouse, whole team

1. Generating different share classes = dual-class share structure - district classis of stock with differing voting power/ voting rights - Class A and Class B shares 2. Maintaining majority control - close relationships with investors possessing large stakes = najoirty control 3. Controlling internal board of directors - close relationship between BOD and founders = beneficials

Why may PE firm not raise levrage to ax even if had option? 1. Lehman 2. Dividend recap 3. billy the goat ****er = elevating capital 3. Taking out personal loan just to apyf rind

1. Greater risk of default 2. pErception negaitve 3. implicaitions for fundarising = more difficult to fundraise in future if portfolio firm bankrupt 44. Dividend recap planned =capacity to add more debt

How can PE firm augment probability of multiple expansion during process of sale? -1. Creation greater Sacha Nate reselling - Téa chatila expansion - Spinning dildo - Eye top firm What you can purcashe in infinity blade

1. Higher-quality business developing - new markets (geo) 0 develop products - strategic add ons

Can startup recover from down round?

1. Internal confitct 2. Dilution may be created T: Lifeline needed to stay afloat + attain goals

What are different forms of intercompany investment? - 1. Buffet in Padlocks 2. Zuck cash holisitc Buffet beakers 3. OIl & GAs M&A post Covid beakers

1. Investmetns in Securities 2. Equity Investments MEthod 3. Consolidaiton Method

Advantages of trading comps? 1. Lazibess vs importnat football 2. To sand down a piece of wood: = not piv = Kian picking berries = stop by school if on way to work 3. Black/rapids valuation + mirror Yerevan calendar today

1. Less data required vs DCFs 2. filings.= public = collection of data more convenient 3. Valutaion current + reflceting up=to-date infor

From perspectives of managemnt, downsides of public? - wheel now shared 2. Pam and Jim = nit picking by Buffett 3. Rise in force on Connell = no glasses = 30-45 seconds

1. Losing control 2. 'disclosure' requiremnets = scrutiby by investirs 3. Greater pressure on managemnet to meet myopic performance metrics

How may operating highly levered comp differ from operating firm within minimal/no debt? -1. After Mary Jane axe mistake can rise associaeted with back: what does Bob the builder do if boiler broken large back ? (agent + cream)

1. Lowe margin for error for highly leveraged firms = high fixed payments relating to debt (prinvipal and interesst)

What does High P/E relative to peer group implying>? 1. Balloon over inflated 2. Denom 3. inflatioin how formed period before branson: Positve outlook EBITDA not inc

1. Market over valuing 2. Eval: company possessing fewer earnings vs peer group 3. Positive sign that markets expecting earnings of company to grow in future + optimistic re growth prospects + caopex current

When DCF not appropraite valuation? - 1. Dwight desk taped off Dad = PS 2. no Giulius above 0 important = rowing comment to Hermes

1. No access to fin statements 2. Firm not expected to genreate positive CF for forseeable future

Why transaction comps an habitually more challenging vs trading comps? -1. No Ft tick tick tick cross not Mum in fT tick tick tikc cross pillhandbag 2. Apple vs Samsing Watch BA assistant relative to skinny body 3.Chasm duffield/Kian (degrees) what history provides

1. No relevant M&A activity in relevant industry 2. Comps long time ago 3. Different econ context of comps

When putting together peer group comps, what are some key considerations? - 1. Ruslan mug shot side 2. Dad side 1. Ruslan - pill/handbag - beginning of Stormzy neighbourhood - dissemination English 2. Dad - Does matter (selling cucmbers fr/ whole value) - EBITDA side on

1. Op profile 2. fin profile Op prifule - industry - end markets - distribution channels Fin profile - size (Equity balue/ EV) Margin profile

Why may two firms with identical cost of capital and growth trading at differing P/E? - 1. Hand on wheel of football field = in pocket oscar buy smaller shovel 2. Madagascar vs Ireland 3. handbag vs pill 4. Hydorgen book facts = accertive/ dilutive

1. Other driver of value = ROIC 2. different geographies 3. differnt industires 4. Inconsistent calculations of EPS

Two main types of preffered equity ivnestment?

1. Participating preferred 2. Convertible preferred 1. Investor receiving preferred proceeds = dividends + claim to common equity 2. Convertible: = investor receiving EITHER 1)proceeds preferred 2) common equity amount conversion = whichever value = greater

What is difference between pre-money + post-money valuation

1. Pre money = value prior to first/next financing round 2. post money = post financing round Post-money valuation = new financing q./% of equity

How value created in consolidation play? - 1. unions + suppleirs 2. Not why M&A 3. French ADH curves societal 4. Lesser Duck swallowing curves purchasing = Yannick link Newton

1. Rise bargaining power 2. Rising pricing power 3. Amelioratioin of cost structure = EOS 4. Lower customer acquisition costs = infra-related integrations

How do fin sponsors exit investments? 1. Discount to shell 2. Slel house 3, Margot swallowing

1. Sale to strategic 2. IPO 3. So-called secondary buyout - selling to other fin-sponsor

Explain dutch auction pricing method in IPO? 2. One arm Vs jessie J on football field merely

1. Share price lowered until all shares sold 2. Not Shares sold at said price, as oppsoed to selling at price which is predicated on valuation alone

What is ideal; type of service/products for potential LBO target? - Hand habitual 1. Bezos in rocket fundamental = Russian boy with ponytail white headphones 2. Curves high of nintendo 3. Christian grey/Wet dreams for a time 4. Elevated Blackstone: Tarka could not jump 5. You vs Alec = Khalid song; Insp adventures aiming to address = you and Dad so dear = Christian Grey

1. So-called mission critical = customer unable to function without product 2. High costs of swtiching 3. Contract based/recurring 4. HIghli technical = higher barreir to entry 5. Competiton location based = fragmented markets ; contract-based relationship

What other factors diriving higher control premiums apart from incentivising shareholders exisiting to sell? 1. CHocolates to elderly = boss brain thinking 2. Five wayne Guoro infront of you 3. Laura demand exceeds supply: table not side goose state to not past or present eye over firm 4. Disney CEO ousted: footvall to net catch= not now 5. firm swallowed deflated balloon

1. Synergies = if mngmt convinced 2. Deals competitive 3. Assets scarse = acquriers strategic habiutally may pay greater premium if asset = ceentrepiece to future strategy 4. mismanagement = signifacint amount of value able to be captured which is currently not 5. target undervalued

What are two most-common ways in which hostile takeovers pursued? - 1. Bruise under boob A*AA 2. Standing in queue punch in face 1. Pacman soapbox Oxford A*AA to gulp zuck from current zuck cash at cream 2. Quque standing - J Ski coax zuck cash in palm to democracy principals = Connel

1. Tender offer 2. Proxy fight 1. tender: - Acquirer publicly announced offer to purchase shares from the existing sharehodlers at a certain premium 2. Proxy - hostile acquirer aiming to persuade existing shareholders to vote out existing management team to take over company

When would use of PEG ratio be appropriate? - Michelle 1. normal distribution fin + to Alec self always comapnies disparate future pie expansion 2. Savova shoulders ruler: - Zuck cash in case unity - deflated balloon below one, about to pop unit exceeds - Fomrula: F(perpetuity) - Why wedding dress not dirty + to future

1. What 2. When appropriate What? - utilised to standarise P/E ratio + enabling comparison to firms with differing expected LR growth rates Broad rule: - stock fairly valued if PEG = 1 - Undervalued if PEG <1, over valued when PEG>1 PEG = (P/E)/g Two approaches to growth rate = trailing/ forward

How to perform premiums-paid analysis in M&A? - Michelle 1. Aubrey on back whcih not George Warr - average bed sheet = Archea energy = Footnote not static transaction

1. When? 2. What? Prepared when advising target which is public - mean premium paid in comparable transaction serving as reference point for deal active

Can high capex industries appealoing to PE? - Affitm - Motte and painey - Vei index with time Jessie Kian ducks can be - low centre gravity 2. Mary jane greater Assets = father Beyocha = lower i/r (what Nicole would decide)

1. Yes if - high barriers to entry - rise pricing power over customers - stability 2. more PP&E = more collateral = better terms eldning

What transaction comps telling which trading comps cannot - 1. Choking excess 2. not Anna comment to you when say you can choose how to react swallowers buffet if eye over firm enacted Borat term

1. control premium 2. POtentially validate buyers/ existence in priv/ market if certain inv strategu has been implemented successfully in past

Three ways in which lower tax rate affects valuation from DCF? - 1. Branson 2. Counterintuive 3.If back larger copycat if 1?

1/ Higher FCF = more net income 2. HIgher post-tax COD = since higher post-tax debt 3. Beta higher = levreged beta higher

Common reasons why M&A deals failing to create value? - 1) YuGiOh cards excessive; elderly do not demand as many chocolates as forecasted 2)George Warr incompetent in bed: high no. buyers and sellers with six months to live 3) lack of eye above firm - employees did not force feed elderly chocolates 4) hands joining not smooth due to dryness/ Ned stark - No affluent Charisma by Connel

1/ Overpaying - synergies overestimating 2. DD inadequate - overly focused on post-integration benefits - especially if comp. auction with timeline short 3. Absensce strategic plan - synergies not being realised 4. Poor integration/ execution - poor leadership by managemt

What is lockup perod linked with IPOs/ § - Half sun takes time go round moon = AA Office market of ZUck cash

180 days = preventing insiders selling shares

What does it mean if debt tranche = denoted as 1st lien/ 2nd lien? - Padlock enture by laura of firm: initial = bonds are best investments 2022 = Facctories if Ash - DirectLine Churchill only if factory left ocnce initially skinny lenders paid

1st Lien= Highest seiniory = fully secured by assets of company = having first claimn to collateral in liquidiation 2nd lien = below 1st lien = compensation provided only if collateral value remaining once 1st-lien lenders repaid in full

explain 2 and 20 comp structure in PE? - C suite vs on back cream - HF this since Taylor in diaper = C suite Giacomo costs type (lights) = Ben Kim -Carrot: 1/5 AC above AR to owners = investing alongside

2% management fee and 20% carried interest a) 2% fee of AUM = management fee for cover opex = salaries of empkoyees b) Incentive fee contingent on performance of fund - 20% of profits to GPs

PE firm tripled initial investmetn in five years,IRR estimate? - multiply +10 -non 72 - one for one lower = Mum age approx five years lower \-

25% 2x in 3 = 25% 2x in 5 = 15% 2.5x in 3 = 35% 2.5x in 5 = 20% 3x in 3 = 45% 3x in 5 = 25%

What are some preventive measures utilised to block hostile takeover attempt? Brooks hand 1. Chechen father in Norway series - current zuck cash andrew farlow long reduces this demand cucmbers zuck cash at sale = robinsons pacman 2. Dick on yellow glider/shute - Raising plus if Squidward at one stage 3. severed hand runnig off Virgil - mor zuck ot every zuck cash in palm except pac man 4. Moriarty steals = Van Dijk - Moriarty stealing = cucmber offload person desiring f*ck above head

4 1. Poison pill = giving exisitng sharehodlers options to purchase additional shares at discounted price = diluting acuirers ownership 2. Golden parachute = certain key employees' compensations adjusted = more benefits if laid off post takeover = deters acquirer 3. Dead-hand defednce: Additional shares additionally issued to each shareholder bar acquirer 4. Crown jewel defence: creating agreement whereby crown jewels of company could be sold off if company taken over = making target less desirable to acquirer

How many years would it take to double 100k investmetn at 9% annual rule?

8 years rule of 72

What would have more impcat on DCF, discount rate or sales? - penis post ejaculation yet

:variables above sensitised; discoutn rate larger

What is a muni bond + one distinct benefit for investors/ - Purpose: Dad status manufacutring high = civil engineer role - Small town + CIA yet more cool

A debt instrumetn which is issued by municopality state. country to finance capex needs e.g road developments Bonds exempt from maj. local + federal taxes

What is material adverse change + examples? - gavel history useful term system preferences = purpose aimed decrease board game of those wanting and aiming to offload cucumbers fête - To-do purchaser what Jemima did no gavel-banging effect - SVB collapse - Shifting eastward Eton talk = 9/11

A legal mechanism the intention of which is to reduce risk of selling + buying parties = listing out conditions permitting buyer to walk away without legal repercussions e.g. Notable changes in econ conditions - Geopolitical changes (terrorism acts) -

What causes incremental D&A to be recorded in M&A deals?

ASset write ups

Who determines vlaue of fair-market wrireups in transaction? - What Kieran mentioned hiring constant/ Rothschild & Co USP App store elevating

Accountants/ Independent appraisers

What is accounting for transaction fees in m&A/ - Marsden key + preceding derivative of this lower

Accounting/legal - Pro-forma EPs and pro-forma net income will be reduced

Who are angel invetors? - Insta verified/ Mum this should be facet of value system = for plants then to grow/when you desired to give Jemima present Christmas firm

Accredited/ wealthy indiv investing seed/easrly stage companies

What does accretion/dilution analysis tell you about the attractiveness of a transaction? - around planet not in particular football field positive: grit sentiment buffet; not around planet = zuck market traded lower

Accretion not necessarily value add; yet does detemine investor reation = dillutive may lead to share-price decline A

Meaning of accretion, dilution. breakeven? - Marsden term consider

Accretion: Pro-forma EPS> acquirer's EPS DIlution: Pro-forma EPS < acquirer's EPS Breakeven: no impact on EPS of acquirer

What is trapped cash + what benefit does it provide? - important held by PWC Saudi with Russia deadlins - retaining = avoid Evan back to UK Zachus

Accumulation of cash oversears by TNCs - keeping cash oversears to abvoid repatriation taxes

From LP perspective, what are advantages/ diadv of PE asset class ? - 1. If not satisfied with Amazon 1/4-1/5 vs APple taxes hebrew 2. Axe vs index fund = collaboration w/ art students A level to curves fall + price in neoliberal vs 3. FTX = large back 4. Ash = no those with cucumbers = non Soviet vs Apple

Adv 1. Return 20-25% relatively high vs 10% equities public 2. PE managers = more-active investors + working closely w/ portfolio firms to reduce costs + create value 1. More risk of bankruptcy - hence why elevated return necessary to compensate for bankruptcy risk 2. Liquidity = inability for investor to sell shares freely, unlike for public firm

If LBO target no exisiting debt on clsing BS, would this raise returns for sponsor? - current shovel societal US splash show once again cap; societal prior = absence metiorite

After LBO, firm wiped out existing cap structure + recap = hence pre-LBO cap structure almost no impact

Which line items included in calc of net debt? - shark/ government utilises to finance expenditure - large watch small watch

All i/r bearing debt = e.g. SR and LT loans/ bonds Net debt = Total debt - CACE

Would you expect all-cash or all-stock transaction to result in higher valuation? - zuck subdued: since holding zuck desire Diskey movie profile

All stock = lower valuation since shareholders of target getting to participate in potential upside of owning equity

What is employee stock ownership plan?

Allocates certain percentage of shares to early employees as well as later hires

Syndicate in IPO exercising greenshoe option; meaning? - Mr Grey (writing under contract to sign) hunting optic Three dimes at no ecess

Allowing underwriting syndicate to purchase as much as 15% additional shares at offering price

What is direct listing + how differes from IPO? - TT - Explain - evaluate 1. firmm market zuck cash to not George Warr absence Aubrey 1. no padlock watch 2. NO important 3. More nedt inocme if not emited 1. How sure are you re Jessie J 2. Not sure not wrong x axis economics zuch cash cucumber in possesseion

Alternative = company sale of shares directly to public without advising of an IB Differ: upside -1. Avoiding lock up period 2. Minimise impact dilutive 3. less fees Differ: disadc 1. No assurance shres priced correctly 2. Unsure if correct q. of shares = sold

What is CAGR + how to calculate? - Per earth around sun rotation mean pie expansion

Annualised average growth rate CAGR: (ending value/beginning value)^(1/t) -1

What is a coupon rate? - how often? rotation around Sun once - Large back debeo

Annyal interest rate which is paid on a debt oblifation

Give example of when dilution beneficial for founder?

As long as vakluation of firm increased sufficiently = up round

Contrast asset sale vs 338(h)(10) election vs stock sale? -1. - Zachius: Penney consuming car-linked plus zachious plus= zachius reducing: settle: megrer vertical academic rationale 2. those desiring cucumbers provides them to indiv with cucumbers - Zachius: purcahser no welfare net - losing cucumbers at Zuck level 3. Pop - ZAchius of Laura no foreign one cheek - True when red concentric circles around dot elevated zero in russian -

Asset sale: - each asset contractually sold to buyer Tax implic: - incremnetal D&A-related tax benefit = tax basis up set = D&A deductible eval: double taxation Stock sale: - Seller gives shares to buyer Tax: buyer not able to benefit from lower future taxes due to deal-related D&A - seller taxed at shareholder level 338(h)(10) election: - provides tax treatment of asset sale without exchanging indiv assets\ - applicable when target high NOLs Tax implic: - Tasx savings of asset sale - Legally stock sale

What does mean when transction done on cash-free/ debt-free basis? - donkey in market in possession of cucumbers cash hand for large back + Tom Cruise Xandi film what aliens doing above rewuired to operate imprimant prior to Pac-Man concluding - less that used to large back

Assuming seller will pay off debt outstanding + extract excess cash before new buyer completing the transaction = cash remaining afgter debt paid down

How to account for convertible preferred stock in share count? - in case ash price tag subdued vs zuck cash = Cinderella carriage at midgit into non scholar zuck cash for not by hand robinsons zuck

Assuming to be converted into common stock for calculation of diluted shares if liquidation value (converstion price of preferred sotck) lower than current share price

What are formulas used to unlever and relever beta?

B unlevred = beta levered (1+(D/E)(1-t)) Beta levered = b unlebvered * ([1+(1-t)(Debt/equity))

Difference between forwards/backwards integration in vertical merger? - if falling this way = Stormzy neighbourhood person more proximate

Backwards = moving upstream = purcahse of suppluers/ manufacturers of product firm sells Forward = downstream = closer to end cusotemr

How to forecast basic + diluted sahre count - Two forces? - $450k HK/ TEsla 70% down - Num of P/E = base *(merger model many analysts signficant)

Basic share count EOP = Basic Share Count BOP + (Shares issued/estimated share price) - (share repurchases/estimated share price) Share price estimate = prior-period share price x (1+ current period consesnus EPS growth rate)

Which side do earnouts help more, buyer/ seller? - with cucumbers = large secret not Shariz nice To x you dad red concentric circles

Beneficial to buyer = since seller taking on burgen of not meeting fin tragets + risk of underperformance

What is a SPAC? - What ultimatumknwo as = hydorgen leader = purpose = elevating shovel through structure 1) Gobble up 2)blob sideways

Blank cheque firm = shell company which is formed solely for raising capital via IPO in order to 1) acquire existing firm 2) merge with several companies

When is difference between Shedule 13-D and 13-G filing? - large democracy/ slaves - dick more serious: at least 1/20 of not George Warr you in terms of intelligence zuck - 5-49.9%

Both declare that investor taking signfiiacnt stake in company in terms of voting + ownership pwoer 13-D: filed when investors acqyires min 5% of public firms's total common equity, 2+ acuqired in previous 12 months 13-G: able to be filed in lieu of 13-D when investor not intending to take control of firm

Wjhy is it important to exclude non-operating income/exp for valuations? - narket based + intrict = football abs steam engine - E,g, = Tobacco payment/ factory offering= income to spend on foreman thinking

Both for comps + DCF = intention to value operations of business = necessary to isolate core operations Examples of non-operating income = income from diviends/ asset sale = stemming from a discretionary deciison made

What is difference between broad-based and barrow-based weighted average anti-dilution provision?

Both including common as well as preferred shares - broad based also including warrants, options, + shares which are reserved for purposes e.g. option pools for incentives

Difference between CAGR and IRR? - ruler penis tennis shot on Buffet - merely Brooks -1, Xavier IRRR = dilation of important sex movements

Both measuring return on investment Whilst CAGR = only three inputs, XIRR function in Excel able to handle more-complex sitautions w/ timing of cash outlfows and inflows

What is right of first refusal + is it interchangeable term with co-sale agreement? B

Both provisionss intending to protect interers of certain stakeholder group Right of first refusal = providing company/investor option to purchase shares being sold by shareholder before other third party Co-sale agreement: providing a shareholder group right to sell shares when another group doing so

What are different debt amortisation schedyules? - silver bond: whole package at conclusion of life - From A to B: reduction in line: reduce overall size = all to be equal - not max lesser loan = lower

Bullet matunrity = enturelty of loan payment due at end of lifespan of loan Straight line amort = principal paynents requried to be reapid in equal intallments until maturitnuty Min amort = involving lesser q/ of annual paymens

When might acquirer perfer to pay for target using stock over cash? - Desiring cucumbers: rainy day - Possessing cucumbers: Forest Gump Appple

Buyer: reserving cash Seller: possinble to share future growth of bsiniess + tax deferrment benefits

Explain what refianncing risk involves? - Churchil not - UK economy potential post Kwasi: Big short black eye glasses eye doctor

Concern that barrower not able to refiannce debt obligations at identical rate as before - credt rating reduction

Why DCF not utilised to value early-stage startups? - no you not mentally +first year working not balloon expanding for when Lolly fascinated - Head scratch to crystall ball

CF negaitve Not reached a stable, sustainable growth rate for 15+ yrs = arduoous to accurately predct

What is WACC if company carries no debt?

COe

What is callable bond + how benefits issuer/ borrower? - reduction large back q if q. impor elevated +

Can be redeemed by issuer prior to maruirty at discretion of issuer - callablke bond meaning able to pay off debt earier if more FCF remainng + can refinance From investor persp: more optionality to issuer, hence debt holders compensated with higher i/r

In sititatioin whereby PE firm option to exit in 1-2 year time frame, why rluctatnt? - investment process all over again

Capital has to be redeployed

If market mattering most when valuing public firms, why do need comps? Why not just use market acp? - Assuming jesus meme

Case if market perfectly efficenty - comps: market efficeint on average yet potentailly off when poriving individual firms

FCF calc? - What should have said in Blackstone - What is not included in said section - Latter not counted given taxes avoided + brain Michael

Cash from operations - capex Cash from investing + financing sections excluded since optional activites and decided by management

Why to add net debt when calculating EV? - Not stripper - important use?

Cash of BS should pay down outstanding debt if required

What is restricted cash; example? - Only for rainy day no what Ryan did to Kelly - On top shelf hence child cannot reach: - e.g. Josh Swidler advice COVID yet with large back necessary form of capex %

Cash reserved for a particular purpose + not available for company to use e.g. company signed agreement to receive line of credit but lender requiring that borrower maintain 10% of total loan as cash amount all times

What do so-called best efforts underwriting agreements involve? - Not you rowing bridge under penning market as high q of problem of padlock as possible

Committment of the equity underwriter to make best effort to sell as much as possible of issuance of securities

Key difference between common/preferred stock? - kian = mathematical (q) - Other = Prius loan type + shares - Men in our family not Dad cover not to holders of zuck cash - PPF constrained by/ no democracy + lower than large back

Common = basic shares = ownership of a firm - voring rights habitually + voting power direct f(no. shares owned) Prefererred sotck = hybrid between stock and bonds = more appealing if risk averse - preferred dividends f diviends cannot be paid out to equity investors, preferred sharehodlers = higher claim on distrubuiton - limited/no voting rights + below debt holders

Why multiple expansion less ideal lever for creation of value? - Tory non changing (value/CF) - Transaction reduce, reuse, recycle for trans = crystal ball red cross

Conservative assumption that same EV/EBITDA as entry - deal environment = not predictable

Firm with $100m in net income and P/E multiple of 15x considerating raising $200m in debt to pay onetime cash dividend. How would you decide if good idea? - curves of large back - Branson pmetric effect - effect on aggregate zuck cash = calc - Eval: net - Settle: donkeys

Consider impact to sharehodelrs ASsumptions: P/e multiples identical after dividend + cost of debt = 5% Net income (to calculate eqv value) declining from $100m to $90 (given the $10m interest expense) Equity value declining from $1,500 to 15x90 = $1350 $150m decline in equity value yet sharehodlers receiving $200m = net gain of $50m eval: depends on assumptions

Is it better to finance a deal via debt or stock? - with cucumbers or without desiring cucumbers - Tesla 2020 = around planet - degree of Julia to large back Innposession of cucumbers before - important (I.e. back large) unless Zachius later number one - zuck discount you natural and Lancaster university

Consider pers Buyer: - When buyer P/E significantly higher = stoack accretive - access to debt financing = influencing willingness of buyer to finance transaction w/ debt Seller: - majority of sellers preferring cash (i.e. debt financing) over stock unless tax deferrment priority for seller - stock sale preferable in transaction most clsoely resembling mreger of equals.

What is purpsoe of covenenats in debt financis?

Contractual agreements = - protecting interests of lendig parties

What is an RCF and what purpose serves for borrower? - back and forth = straight of not debit - Important not enough

Corporate credit card A revolving line of credit which is drawn down when FCF being generated not sufficient

What to remember in WACC calc?

Cost of debt tax effected

Difference between coupon rate + curretn yield - calc = yearly / graves handsome - black = ticket/ Jessie

Coupon rte = nominal yield = annual coupon/face value Current yield = coupon payment/ price of bond

What is difference between current yield + yield to matunity? - Key PE on loan -contributed to by end value being clawed back, yearly paid + donkey Dad + large watch Brandi

Current yield = coupon payment/ price YTM= IRR on bond - YTM = f(principal recovery, coupon payments) and assuming reinvesmtes as well as tim eto maturyt

Contrast DCF with trading comps - Streater PHD studneet complains - Boarding school selling cucumbers - Penis post ejac - Visibility low - 75% - Cumcumbers buying selling Jessie J - Sneeze

DCF adV - valuation predicated on CF most academically rigorous - indep of market DCF cons: - Sensitive to assumptions - difficult to forecast - TV 3/4 of implied valuation Trading comps adv: - relies on market pricing Trading comps disadv: - vulnerable to market sentiment

Which valuation method most variable? - Intrinsic - Michael choosing direction when = donkey of you and me - Tesla 2020 P/E through pinoculars aiming graphings striker observing

DCF due to reliance on - discretionary assumptions -forward-looking projections

How does valuing private company differ from valuing public? - Kian not not IPO IS, CFS, BS sex tape on Pornhub - If this then likely will not do = you are lazy - not TCFD - Ash lower = not Ash sale = 1/10th to nearly 1/3

Data availability - not necessary for priv companines to make fin. statements public - if provided priv fin statemenets = similar to piblic except, fin discloses less standarised - less liquid + illiquidity discount c. 10-30%

Why are DTL created in transaction? - Laura pen - FIG do a lot Laura pen to Solomon cucumber tag - Zuck-cash sales, zachius not rocket to moon in line reading laura higher - car eaten up on Laura pen greater for FIG childhood vs zachius

Deal-related asset write uos - when firm acquired, assets' book basis often written up to garir market value - when structyred as stock sales, tax basis not always stepped up to align with book basis write up - DTL created since depreciateion on written-uo asets higher for book purpposes as opposed to tax puoses

Apart from market risks, what risks do bond investors face? - err sorry, can't pay - INstagram titty: would like cash in return for sex falls - Ocurrence = swallow = altering board game in pocket

Default = deteriorating financial performance Liquiditry = ability for bond to be exchanged reduced Event = M&A e.f. which cold change risk of holding bond

What are two types of pension plans and how does the accounting differ for each? - first: women once/28 days =treated as utilities - uncertain every time q = to orgasm future = dictionary after 65 welfare - Pam paying+ scaling to reality: laura or back section

Defined contrinution - employer maying periodic specified contributinos into plan - SG&A Defined benefit: - Employer estimate each period how much of contrinbution needs to be made to satisfy upcoming so-caleld definted post-retirement benefits - SG&A + then liability/ asset on BS to offset

A company tradig at 12.5x EBITDA, is it overvalued? 1. Handbag/pilll 2. Wallis - Radley flaunting person selling code to Google heights method vs excess two hands in 50% returns Dimon more investment = leukemia

Depends on 1. Industry 2. How valuation comparing to rest of peer gruop e.g. If software 12.5 then sector median vs double digit in oil & gas ratre

Imagine two companies =identical total leverage ratio w/ identical FCF + profit margin. Do both companies possess identical q. of default risk? - important

Depends on q. of cash on BS: if one company notably more cash = most likely better positioned in terms of risk - also should examine net debt/EBITDA

What happens to exisitng NOLS of target in transacton? - Eval: triangle - Laura: lower Josh on cucumber reduce taxation burden - zuck discount: at point later lower yearly forward carry

Depends on structure of deal - asset sale: NOLs able to be used up by target to offset gain on sale on corporate level. Acquirer does not acquire any more. - Stock sale: NoLS able to be used by acquirer in future yet subject to limitations = limitation annual carryforward

Intituively, what is meaning of P/E ratio? - x axis economics buying and selling cucumbers + able hand over for unit global reseve of Brason - Einstein theory football company to Wallis + handbag/ bill mean - Solomon football/Balloon about to pop -

Determine the relative value of a firm relative to peers + industry average = whether company fairly value/ over valued Answering question: How much is market willing to pay for a dollar of this firm's earnings?

What is dist waterfall in priv equitry? - 1. Dissemtinuation AR anbove AC in preferences hierarchy 2. Blind entire nearly 10% .3. one fiffth other = what you needed to do if missed lesson for music lesson 4. 4/5 blind, rest non bloonf

Distribution of proceeds from investment in systematic order on basis of claims' priority - Notion that every stakeholder having different claim on profit pool depending on security which they hold 1. Initial investment from LPs returned in full as well as returns linked to a fund's pre-set min hurdle rate (min. threshold return necessary to be received by LP (c. 8%) prior to GP receiving carried interest) 2. 20% of profits to GPs as result of 'catch-up' clause (s.t. incentive fee = function of total return) 3. Remaining 80% LP and 20% to GP. Yet percentages vary

What are redemption rights?

Feature of preferred equity = enabling preferred investor to force firm to repurchase shares after particular period - protection against prospect that prospects turn bleak

What is purpose of fairness opinion in m&A context? - Aubrey with cuumber to Axe had to make seem like 'bad buy' to these indivs = Solomon of handshake from EmployAbility

Document provided by IB of seller to board of directors of seller = attesting to gairness of transaction from third-party perspective

What does it mean when bond trading at disount par or premium? - comment re interest rate and paper

Dsoucnt = price less than100, yield greater than coupon Par = price = 100, yield = coupon Premium, price >100 = yield less than coupon

Difference between EV and equity value? - PH 7

EV cap structure neytral

Which multiples most popular in valuation? - 1/ Margin 2. Line 3. FIG 4. What in Fig childrhood fo 5. Startup: Whole value/ if AC>AR

EV/EBITDA EV/EVIT P/E P/B for FIG Ev/Rev unprof

Ehat are common EV and EqV multiples? -Wholle/Kroll - Whole/line - Whole/ Margin - Banks valuing - cost/ FIG price - Cost of share/ important with large back

EV/Revenue Ev?EBIT EV/EBITDA equity: P/E P/Book P/Levered cash flows

What is staggered board + how fend off hostile takeover? - every limb of BOD taxonomy separate Aggie working contract period - swallowing more muscle watch BA larger + you trying to understand anything

Each board member classified into distinct classes w.r.t. term length - gaining board seats additional = more lengthy/ complicated process for hostile acquirer

Impact of leverage on beta? - Dad vs briefcase in particular

Either equal to or greater than unlevered = combined risk encompassing both financial + business specific risk

If had to choose two variables to sensitie in LBO model, which ones pick?

Entry and exit multiple

EV formula?

Equity value + Net debt + preferrred stock + minority interest

What is term sheet in VC?

Establishment of specific agreements of investment between VC + early-stage firn

Typical capital structure prevalent in LBOs? - Settle - Kondratiev waves + Sound wave up down Dad flora and fauna - Back to Zuck: Mendel's pea finding decade PE/ habitual portfolio allocation stocks and bods

Eval: cyclical + flucuate on basis of finacing environment - 80/20 D/E in 1980s to 60/40 now

How to determine which valuation metric to use? - no perfect = permutation alternbative = where golf shots practicing - Waste companies George = cucmbers selling not Aerys Targaruen yes or no to love of learning alleged non market

Every valuation metric = shortcomings hence combination = arrive at a range - trading comps frequently provide market-based sanity check to intrinsic DCF

Benefits of industry beta approach? - not stats not alpha from Wallis to red concentric circles

Examines beta of comparable peer growup + applies said beta (derived from peer group) to target

What does cash sweep refer too?

Excess cash flow once revolver repayments used to make optional repayments on debt, assuming that debt tranche permitting early repayments

should target commpany be included in peer group? - Left or right tail max intelligence football of concentric circle -Eval: what does market do?

Exclude since inclusion of target skews multiple towards current valuation of target Eval: intutation is that market may misprice indiv stock yet corrent on larhger basis

What ios rolloer equity + why PE firms perceivng positive? - Jemima car of X threw up pets zuck cash more shovels next to Dad standard chartered Liverpool - inferr = board game= hence reflecting maybe explosion

Existing management may rollover some of equity company + may contribute additional capital alongside fin sponsor - implication that risk undertaking = worth potential upside

Should two identical firms with differnt leverage ratios trade at different EV/EBITDA multiples? - Consider what type of variables above: AR-AC + football which what Eton and Cothill teaches you of shovel societyal - Settle: total on price tag of shovel

Expect similar since EV + EBITDA = measures of profits and value independent of capital structure of firm - eval: not exactly since EV dependeing on cost of captal

What are synergies and why are they important in a deal? - Projected Penney would approve top line/ AC in pocket as result of swallowing - If brain = Bed sheets of this quality transacted - 1. Price x quanity = Argos in Sains rather near Aldis vs Chocolate elderly - 2. Negative = less Venn diagram central working

Expected incremental revnues/ cost savings materialising due to an acquision - important since if realised = higher premium paid Two tyoes 1. Revenue = upselling and cross selling 2. Cost: elimintation of overlapping workforces

Why is calendarisation importatnt when performing comps an? - beginning of Hunt in charge of annual = translation John aubrey second time round - Green hydorgen +Fresinolo positive or negative maths

Explain - aligning fiscal-year ending dates of group of comps to allow for a comparison which is more accurate - seasonality + cyclicality potentail to skew results

What does FCF represent? - income can spend on Foreman grill to wake up to Bacon smell important - Important not run for hills = Langauges Durham - sotify subscription Daddy's credit card = turbines even after switched off engine

FCF = a firm's discretionary CF = CF which remains after accounting for recurring expenditures in order to continue operations

Define FCF yield + compare to dividend yield + P/E ratios? - Important/ xuck cash total / sharhodelrs (think of what a bond yield is relative to) - BILL/SHICK = ZUCK CASH one in pocket vs before merger rises - Important To heat produce vs jesus enough fish for all: more integral as Apple - one over: link to other? - chest jessie J term equity to imprtanct vs conceptual revenue-costs - why Core CPI considered

FCF yield = Free cash flow per share/ current share price In similar way to dividende yield, FCF yield able to gague equity returns rlative to sahre price of company Unlike, FCF yield = based on cash generated rateher than distributed - Arguably more fundamental measure as large no. companies not issuing dividends If inverting FCFY = share price/ FCF/ share = CF version of P?E - benefit = benchmarks prices to actual CF as opposed to acfrual profits - eval: potential for CF to be volative

How to calculate offer value in M&A? - Entire RObinson's - What you were offering Alex Hall

FDSO xoffer price per share i.e. equity

When firm raising capital, why is case of lender less optimistic than projections shown to raise interest from equity investors? - no carrot and stick = donkey Maurizio towards Patricia when she provokes hum - Induction start for large back binding = limbo = requirement that firm greetings large back duty to your family first and foremost

Few incentives to show assumptions affressive = base case for debt covenenats set off lower base = obly need to demonstrate that company able to meet debt obligations

How does accounting treatment of fin. fees differ from transaction fees in lBO? - Intangible assets + shovel

Fiancning fees =relating to debt raising/ equity issuing - fees capitalised + amortised Transaction fees = M&A advisory = one-time expnses

What is S-4 filing + when filed?n - Gary Gensler company does this prior to swallowing

Filed with SEC prior to M&A

During IPo, what is meaning of firm committment> - sell side making ass of you and me board game associated with not market one facet through swallowing every padlock by firm

Firm committment = when IB = underwriter of IPO = agreeing to assume all of the isk which are linked with failing to sell all shares which are being listed by purchasing all secruities issued directly by comoany

How would earnout modelled in three statmenets? - Structure systematic - if this fails cash handed over subtly Mum tip mirror, not engine steaming Josh/Dad passing - if plan fails Jamie cares; broken Solomon football - if concentric, handshaken outlay yes

First IS IS: Change in value of contingency payment reflected in non-op gain/losses section Then BS BS: contingent consideration in liabilities section + recorded at measured fair value Then CFS CFS: If target met, agreed upon payment here recorded:

Explan strategic rationale behind add-on acquisitions + how creating value? - TT - Michelle - when briefcase of sponsor = Oxford M&A one function = swallow lower in size 1. Fish and chips stripper take it or leave it = plus cross selling adults chocolate 2. Tea CHatilla 3. Eye over firm competition 4. disintermediation INsp adv solving

First what, then why What? When portfolio company of PE firm (platform) acquiring smamler - Also known as roll-up strategy Why? Strategic rat = 1) add on complements platform's service offerings = bettwe able ynergies 2) entering new markets to extend reach 3) Permitting platforms to compete w/ strategic buyers within auction-based sale process as potential for synergies to be realised Inorganic growth linked to add ons = fundamnetal rationale for investment = certain firms may specialise only in consolidation play = attempting to acquire firm operating within fragmented market

Difference between fixed and floating interest rate? - identical despite global warming - Not = knot to Constantine + milk

Fixed: i'r expense paid same regardless of changes to enviornemtn for lending Floating: Tied to LIBOR + spread e.g LIBOR + 2%

What is purpose of min cashh blanace?

For daily operations to meet NWC

What is exchange ratio and what are two main types? - broadly speaking two types exchange rate - rates on debt: - EPS bottom chained vs football variable - buoy: X axis of economcis per zuck Football constatant

For either partial or all-stock deals, purchase offer capable of being structured as either fixed/ floating exchange ratio 1. Fixed: clearly defining no. shares of acquirer's stock to be exchanged for one share of target 2. Floating: setting specifc quantity per share which the acquirer agreed to pay for every share of target's stock in form of acquirer's ahres

Contrast friendly vs hostile takeover attempt - Not Tom Szostack of J cracking + principal - Absence to Anyra wayne guaro - Pac man swirve past principals + cracking bod = to zuck cash in palm

Friendly - consent of both boards of directors (BOD) + managemnt teams Hostile: - habitually after failed friendly negotiation - Acquirer aims to circumvent board of directors + managemnt = going directly to shareholders

What does highly confident lettetr diffrer from firm committemtn letter? - cucmebr both parites Max rowing yes but you no: Zuck owning said type of holding Nate thought Harvard - credo can lift yet not rowing

From from perspective of seller + buyer, committed financing prefreered since nearly guaranteed to finding upon closing - believe able to raise but not committing to it

What is a full ratchet provision, and how does it differ from a weighted average provision?

Full ratchet = anti-dilution provision protecting early investors + preferred ownership stakes in cahse of down round Weighted average: - utilises weighted average calc which acts to adjust conversion ratio = account for any previous share issuance + prices raised

What is clawback provision? - return = carrot to non bllind over the agreed in origin

Giving LPs right to reclaim proportion of incentive fees distributed to GPS over orifginal agremenet - i.e. GPs overpaid in terms of carried interest

Two classifications of money-market accounts? - state = type of dynosaur - Amazon cucumbers Axe cap: birth of none of these redeemable GD

Governmetn = T bills Pirme MM funds = certificaties of deposti

What is difference between gross IRR and net IRR in PE? - from fund persepctive, to whom to payments need to be made?

Gross IRR = assess returns of GPs on pure basis = before outflows to LPs Net = returns of fund at LP level

WHen growth-equity investors pursuing industries in which to invest, how differs from industries targeted by orthodox buyout firms?

Growth equity = winner takes all secctors vs private equity = defensibility in CF -= revnues

Company has Eps 2 which has declined to 1 four years later. Assume share price remained same at ten. IS current P/E ratio higher or lower vs four-yuear-back P/E ratio, + how to interpret situatiON? - Dynamic: state numbers themselves - About to pop balloon - 1. Financing Zuck cash higher 2. Acquihiring potential rationale for this, zuck cash majority

Gufger 5x vs 10x Interpretation = comapny noe overvalued due to EPS deterioration Yet since share price unchanged, potential expanations 1. Company issued more sahres to raise capital = dilutive effect on EPS 2. Company potentially making dilutive acquisition w/ stock as predom purcahse consideration

How is max leverage used in LBO determined typically? - Portfolio intelligent investor recommendation - Back/Buffet does not desire: Hand + lsoer

Habitually 60% debt 40% Equty Debt/EBITDA vs 5.0-7.0x

DUring IPO, what is role of underwriter? - 1. Balls mistake sahres 2. Attempt guarantee = largely Hamish Forsyth = LOI = buy bexclusively = not closed sell and buy 3. OIvestor on Zoom 4. hypoe 5. Jessie J

Habitually IB = intermediary between firm issuing securities + investing piblic Max value received 1. Handing issuance of stock 2. Ensyring public predominantly institutional investors = committing to pruchase issuance before it becomes available for -urchase in open market 3. Handling roadshow 4. genreation of interest form potential investors 5. Priving IPO

In which industry earnout more prevalent? - PE significant present here US

Healthcare

What are capex+ NWC considerations for PE firm looking in potential invesmtent? - expansion vs current operations latter - Cleaner

High capex and NWC negative perceoption sicnce firm requirieng more cash usage to grow and fund operations - less FCF to servie IR paymetn Most capex erelated to maintenance

Walk me through M&A model? - 1. Laura jessie J = outlflow 2, Inflow 3. Snapshot changing - marginal = above fair market value 4. Handshake assocaited reduction height + large back - No zuck cash 5. Operatingh ideas - key metric

High level: taking two companies and combining into one entity 1. Assumptions re purcahse price + uses of funds - refianncing debt of target, for instance 2. Assumptions re sources of funds - cash/stock/debt 3. BS of acquirer adjusted to reflect consolidation of target - calculation of incremental goodwill 4. Deal-related paydown = (reduction in principal) and borrowing, paydown + elimintation targeted equity 5. Income statements combined to determine combine pro-forma accretion/ dilution in EPS

A bond has a call protection clauseof NC/2. What does this mean? - PE firm able settle + death by

High no. hybrid financings having call protection caluses lasting 2-3 years - NC/ 2 = call protection for two years = once period passed = borrower can repay debt along with penalty fee for prepaymen

Does higher beta translate to higher or lower valuation?

Higher beta = more risk = higher discount rate to value CF of company = lower valuation

Why not finance only with debt?

Higher risk of default - optimal cap structure includes mixture of equity and debt

EWhat is effect of low i/r envrionemtn on DCF valutiuons?

Higher since discount rate lower

If company continuously incurred impariment charges to goodwill, what do you take away from seeing on finacnials? - Ebay Skype: excessive transaction for laura

History of management team of overpaying for assets

What is holdback in M&A? - percentage of Jessie J hut in Siberia safeguard debt earning of pac man

Holdback mechanisms may require portion of purcahse price of acquisition to placed in escrow to protect interests of buyer post-closing

Can you define what cap structure of company represents? - Methods breifcase Dad Dad how much generated process (ruslan) + What do at 20:00 + pie larger - combin back + Zuck shares - Brandi = large back Dad lemon squeaxy since FTX board game falls

How company finances ongoing operations as well as plans for growthn - mix debt + equity - as mature can obtain debt finacing easier since lower defualt risk

What ar habitual characteristics of preferred stock?

Hybrid between equity and debt - between two in cap structure - hgher claim on assets than preferred stock + receiving dividends = cash can receive or PIK - no voting rights unlike stock

Define equity risk premioum in CAM? - Penney D&A board came from buffet = zuck cash vs treasruries - Formula = Giuliua cucumber in pocket - Treasuries

INcremental risk (excess return) = investing in equities vs risk-free securities ERP = expected market return - risk-free rate

What are two most common return metrics utilised by a PE firm? - power yearly cream - important

IRR = effective compounded annual ir = (FV/PV)^(1/t) - 1 Multiple of Money = Mom = total inflows of cash/ total outflows of cash

Differene between WACC and IRR? - Latter: Chemistry of in pocket on ronaldo partner of PE infra predom - mean cash sweep funciton required chemistry of in pocket for Zuck cash + large back of suppliers hovel

IRR = rate of return on expenditures of a project WACC = average minim necessaru rate of return for both equity and debt providers of vapital

What are most common IS adjustments in M&A model? - Top line: elderly chocolates purcashing - core + Giacomo term: Giulia term kept using pam fitting - Penney reduction in car value: laura pen higher = car swallowed - handshake cost

IS: - Revnue = raise by revenue synergies - Opex: reduce consol expenses by expected cost synergies - Incremental D&A: asset write ups habitually results in more non-cash D&A - Other exp: transaction fees

IF a company incurrred $100 in PIK interest, how would three statements be affected?

IS: Ineterest expense $100 rise on IS = ebit fall by 100 = down by 60 CFS: net income down 60 yet $100 = non cash added back hence + 40 BS: cash up 40: debt up 100 but sharehodlers' equity down 60

How would raising additional debt affect DCF? - Valuation predicated on important = shovel societal PH 7

If EV predicated on unlevered DCF = relative unchanged given DCF neutral to cap structure DCF raised may change capital structure weights significantly; COD may rise

In all-stock deal, can you determine whether acquisition = accretive/ dilutive? - Case dilutive - prblem:

If acqurier at lower P/E than target = dilutive - More shares necesasry to be issued = raising dilutive imapct = since denominator = pro-forma share count = rises = EPS dilutive Simpler way think about it? - What is aim of aquirer increase EPS by paying as little as possible for earnings - Higher earnings/ price vs you = lower P/E - Overall = if P/E lower (E/P higher) then the dilutive effect of share issuance smaller vs rise in earnings = EPS accretive

Name a scenario when post-deal EPS accretion/dilution not significant consideratioN? - Eton/Radley/ Winch + Inspirational adventures

If buyer public and target + starup purcahse dor acquihiring purposes

When would investor prefer fixed rates over floaring rates + five vers? - if too high set?

If i/r expected to fall in near term = ddised If investors expected to rise = floarding

Assume company trading at forward P/E of 20x and acuired company trading at forward P/e of 13x. If deal is 100% stock-for-stock and a 20% premium paid, will deal be accretive in one year?

If stock for stock and acuirer PE higher thne yes accretive - 20% premium meaning target's PE to 1.2x 13 = 15.6 sill below

When may cusomer concentration be considered at manageable leve? - Not RHaenyra to Alicent accusation Cristen Christian Grey - Philippa onion snacks = Impulse beach house Bobby Axlerod = Jessie J

If there are irrevocable contracts e.g. forms of long-term customer agreements - contractual obligration = concentration risk more tolerable yet still discount on so-called purchase price

HGow can TV be sanity checked if exit multiple approach used? - what is other variable = consertvative assumpton

Implied g: - (TV * r - FCF final year)/ TV + FCF final year) - implied TV exit = Terminal value ppt method/ EBITDA final yaer

What is pay-to-play provision + purpose?

Incentivising investors to participate in future finacning rouns - provisions necessitate existing so-called preferred investors to invest on pro-rata basis in subsequent finacning rounds = if not = losing some/all of preferential rights

How to handle stock options when calc share count of company? - Robinsons if giletable = hit price under bridge

Include in dilurive share count any vestable (exercisable) optinos the strike price of which below current share price

Do inventories captiredn iS?

Indirectly through COGS

What determines debt capacity of firm? French archiers + 1 - 1. Pill.handbag 2. you vs Alec/ Fazzino doggy in cucumber sell + buy 3. Mallinkrodt not indicator of future

Industry risk 2. Competitive posititon within market 3. historical perforamcne

What is accounting treatment of operating leases? - Identical to Dad lease on picture = Amaar - First lower (Giacomo) monopolisits exploit this Ronaldo partner store front not understand three per year

Initial impact on BS same as finance leases: initially recognised as liability + value as asset = PP&E IS reduced by rent lease expense throughout lease term - $500,000 annual lease on opex per year

Why would company issue euqity vs debt? mention re debt advantage + disadvantage - Cream Zachius - Less Savova: who are you wearing that for? back Adam and Eve + God

Interest on debt = tax deductible Reduction in flexibility = restrictive debt covenents

Difference between investment-grade + spec grade debt? - Three tits: robust not debit side - subdued board game nonpayment - Piranha in HD - More board - greater yield

Inv - Credit rating BBB above - strong credit profile - low default risk Spec - BB below - riskier credit profile - interest rates higher

Explain power law of returns in VC investing + implications?

Investments made in VC on expectations that most fail = single investment can be sufficient for firm to meet return hiurdle = emphasis on market size when examining firms

Tell me about J curve in PE returns? - Sam praying figure - first circular Bhar model negative

J terms = timing of retunr proceeds which are receivied by LP of fund - first negative gradient as iniitl invesmets = capital outpuflows yet as esit = positive

Recap vs LB0? - Swallow: Laura higher and brand value - spipt: laura identical + lack of brand name; below zero in pocket

LB0 = acqusitons - assets written up + goodwill recognised Recapitalisaton = not accounted for as acquisition -asset-base carryover remain unchanged + no goodwill - as no goodwill, negative equity created often as offer price higher than book value of equity

What is management buyout? - Priv equity structre but after = majority of zauck cash from Elon Musk

LBO whereaby a signifiacnt % of post-LBO equity stemming from previous management team

For PE funds, Limited partnership = blind pool. Meaning? - LP = brains limited; doctor sort of driving + buffet, key GS to emphasise

LBs not directly involved in firm's investmetn decision; investmetns made at discretion of GPs + investment team of firm

How are leverategd loans habitually proced? - Benchmark outdated+ chocolate

LIBOR + spread - LiBOr floor

When valuing firms utilising multiples, what are tradeoffs of utilising LTM vs forward mulitples? - 1. tangible Settle: Hearing post electric ball by you and success Ronaldo partner + inflow 3. Companies pacmaced chemical in battery not present or past

LTM = historical = advanayge [= actual - eval: distorted habitually by non-recurring expenses + income Firms habitually acquired on basis of potential in the future

Name scenario whereby multiple contraction common?- - The whale - Up food chain = no larger fish? - Not (WHy capitalism so dynamic) - deflation in terms of Jessie J

Large-sized firms - as company growing larger = no. potential budders smaller = less competition = lower purcahse rpice

What are charas of mezzanine financing? - Epidermins blood and air large back + zuck cash - most exp in societal - sefs within no. (insert) - NO padlock - Mr Grey Savova - creaM Mary Jane untilisrd

Layer of financing lying between traditional detbt + common euqity - loweest form of debt with cap strcture - all unsecured - terms highly frezipe - i'r nigh

What role does lead investor have in financing round?

Lead investor = VC firm/ indiv which organises funding round for a firm - utilise network to aid firm raise funding + make introductions - credibilitu

Tell me about debt lender + equity investor story disconnect? - Large back Mallinkrodt

Lenders = backward looking

If acqirer wiritng up value of intangible assets of target, how are goodwill and amortiseation imacpted? - George warr vs Dora Harmsworth

Less good will - private companies cap opt to amortize goodwill vs public cannto

Leveraged loans vs bonds names examples? - LBo context consider = credit card/ specific time period - Public: max padlock on dick - max no padlock on dick, Ben to Czernin

Lev loans - revolver Term loans Bonds: senior secured - senior unsecured -subordinated

How to measure credit health of pre-LBO target? - large back - Powell + pill - max hand + two - cream cream - french archers

Leverage ratio -eval: depends on lending environemtnet + industry - habitual total devbt/EBITDA in LBO 5x=7x INterest coverage: - Higher the better - at least 2.0x in fist year following buyout!

How to calc levered FCF yield for PE investmet + when used? - core - do this to make money - large back

Levred FCF = EBITDA - Taxes - interest - capex = rise in NWC - mandatory debt repayments Lev FCF yield = Lev FCF/ Initial equity inv

Preferred shareholder has 2.0x liquidation preference. Meaning?

Liquidaition preference = contract giving a particular class of shareholders right to be paid ahead of other shaholders in case of liquidation Investor guaranted 2.0x investment before common shareholders receiving proceeds

For early stage firm, what are options for liquidity evnets?- - Michelle - to market for cumbers desiring to relinquish % of entire Zuck - Differential not entire funds outflow = Thiel - Swallowed by larger

Liquidity event = when founder of priv company + early investors can sell some/all equity ownership Partial cash out = provider = VC Strategic aqcuired

Difference between bond and leveraged loan? - George warr handshake shark + in need - cream = SONIA + nutella = padlock assets with arc - Assets, Arc, time before agent, yield lower - Blood = Rupert walker not George Warr

Loan = private transaction between lender and borrower - interest cost normally LIBOR + Spread = secured by collateral with covenants - due to collateral, covenants, earlier princip repayments = lower interest rate Bonds = public transactions

What does LIBOR stnad for?? - interest fin insits shark between

London interbank offered rate = standard to set lending rates = rate at which banks lend between each other

What are subordinated notes? - greater singer type + greater cream = Churchil board game life size

Longer tenors (time before fin. contract expiring) + higher i'r which act to compensate investors for the undertaking of more risk -

When would it be appropriate for firm to distriubute dividends? - pie slow exapsnion absence high no AR-AC frpom where Lil pump from - Education one purpose firm Morisson BA large watch AR-AC in future + why tobacco investors invest

Low growth With few profitable projects - dividends = signalling that company confident in LT profitability + appeal to dividend investors

What indsutries attract more deal flow from fin buyers? - Brooks hand 1. Not fresnilo/ balloon stagnant: in grave swallowing 2. Christian Grey/Spotify = on table standing + wet dreams for a time top line 3. Pill Pharma elevated = swallow firm with iPod = swallow MMM = Shell later hydrogen prospects 4. Elderly chocolates: person try to hit on Mateja bday 5. Automation

Low growth/non cyclical = turning to inorganic growht Contractual/subscrioption based = stable/recurring revenues HIgh RID =preferring acuqiring companies with products = hence PE acquire smaller niche players = know strategic buyers will desire to purchase later Potential for synergies: software Fav. iNdustry trends

What is relationship between duration and coupon? - Macaulay think - Payment low = extended timning - greater = timing short

Lower coupon = longer duration = PV of cash flows more spread out Higher coupon = shorter duration = PV more concetnrate

Define M&A - Podcast dog running = permutation other of firms more than one less than three intiger - Those desiring cucumbers: PE to Sales through more-effective advertising vs Amazon Bezos dollar generate

M&A umbrella term referring to combination of two business; for buyers = M&A alterantive to organiic growth vs sellers = M&A = chance to cahsh out

Difference between Macaulay duration.+ modified duration? - Facny = 35.5 calcium; clock; adjusted important - controller = Foster finishes sentence delta following base delta uno

Macaulay = Weighted average timing of PV of CF Modified = percentrage change in price of an instrument given a 1% interest rate chaneg

Tell me how calculate IRR in excel

Magnitude of CF outflows/ inflows and dates XIRR = (range of Cfs, Rangd of timing)

What is one key differnece between maintenance and incurrence covenants? - opex: post uberty once/month assessment: filings number per year four

Maintenance subject to period tests = at eqach quarter

What is difference between coupon + discount bonds? - pronlem vs Brandi none - sale to graves handsoome football

Making no payments between issuance and matunrity

What is equity value+ how calculated? - Football of firm to zuck cash possessors - cucumber selling structure - Draw bridge up * Aggregate robinsons suck cash Dist

Market cap interchably used - value of company to equity shareholders Calc: latest closing share price * Total Diluted Shares Outstanding

Name example of asset exempt from cost-principle rule? - able cucumber padlcoks - ASh

Marketable securities - notably liquid

What is difference between asset-based loan + CF revolver? - Irons sketch: depends on ASh Laura - Irons sketch: to whom loan shark lends Mallinkrodt + future important what can go bust

Max. q. which can be drawn from ABL = predicated on firm's liquid assets vs max. q which can be borrowed from CF revolvers linked to borrower's hist + proj CF generation

How to handle restricted stock in share count? - Jemima to your message re balls since no gilet - Settle = when Gwendy invites to pub in Robinson's squash as gilet sometime

May ignore since entirely unvested - eval: increasingly included in diluted share count since they'll vest evenatually

Leveraged loans becoming increasingly covenant lite = what this entailing? - gold ring = open relationship - bitch assessments when raising debt vs pre menopause

Meaning = packaged with incurrence covenants which are less resutrctive vs traditional maintance cov = compliance tests only required when taking certain action as opposed to being periodically

When applying peer-group-derived EV/EBIRDA multiple onto tagret, what is arguemnt for utilising group's median multiple rather than mean?

Medians removing distortive effects of outlirs of the so-called peer-group multipke

What does purcahse consideration refer to in MUA? - beakers pac man cash hand over zuck in pocket of on back red concentric circles

Method through which acquirer proposes to pay sharehodelrs of target

Explain investments in securities? - one fifth = one appendige out of all toes and fingers

Method used when company investing in equity of another company yet ownership percentage less than 20%

Why necessary to look at both IRR and MOm when returns calc? - No discount rate - wrist watch, penis after ejaculation watch

Mom not considering time value of money IRR notably sensitive to timing

If given MOM of investment + no. years investment was held, what is formula to calculate IRR?

Mom^ (1/t) -1

Typical relationship between beta and q. leverage used? - Brandi = not alpha subdued = greater % shoulders large in fr no societal as lemon squeazy swallow inexpensive Dad - elevated not alpha = no large back particular = elevated melting low boiling point = price of Dad elevated

More mature companies with lower betas.= higher percentage of debt in cap structure since able to easily acquire cheap financing vs HIgh beta reluctatnt to use debt or if do, terms of debt less favourable - higher volatilty = cost of financing greate

What is S-1 filing + how does differ from red herring? - Required all moon companies = not George warr on list - Rationale: - 1. PE stage two 2. Morisson lean startup 3. Running when with Tori movie Shake it up right now pastures 4. Tux vs Harry

Necessary for all US firms which are aiming to become public oliste + registed on exhange = IPO planned Purpose 1. Planned utilissation of capital raised 2. Businesss model 3. commentary current landscape vs Red herring = more formailed re 1. strategy of IPO 2. IPO's information

Three forms of covenants in lending agreemets? - no = back cannot get larger - love language: SPAcs greater ( for first time shark Streater) - TT: same ensure/ debt

Negative = restricting obligor od debt to refratin from tasks e.g. cannot raise debt Affirmative: = required to perform specific tasks e.g. meeting fin. reporting requirements Financial: 1) maintenance 2) incurrence

When should you value company utiliing revenue mulitple vs EBITDA? -

Negative profits = revenue

Could company have negative net debt and have EV lower than equity value? - greater important vs back - Jobs/ Gates

Net debt negative means company has more cash vs debt = Microsoft and Apple hence EV lower than Eqv

Why revolvers normally not having leverage test? - Cream take this

Only having interest cov ratio rtest - revolver = highest priority within capital structure

Why is normalised share price used when calculating offer value? - vegetable in boat

News of deal can leak = changes to share price

If a company raises $250m in additional debt, how would EV change? - Fourth economic resource = PHT 7 shovel societal - eval: curves of Dad = cream = Greg affect AR-AC = football falls due to video game shooting greater

No impact as EV neutral to cap structure - Both debt and cash balance would rise Eval: cost of finacning (via i/r for instance) could egregiously impact profitablity = result i nlower valuation from higher debt cost

How to value painting?

No intrinstic value, no CF geenerated Price = f(willingness to pay in market) as opposed to anchored by fundamentlas - comparable

What does proof-of-concept stage involve?

No working product Investors usually famuly, friends/ angel

Caveat of IPO exit? - 1. Large watch 2. House arrest on padlock no with cucumber offload desire

Not immedeate - IPO path 1. Time consuming 2. Lock up period sharehodlers not permitted to sell shares

M&A deal has adjustment for deferred revbenue write down why? - person tried to hit on Mateja's bday: top line = large watch BA helper unhealthy OSG Kung Fu Christian Greet = football once again checked

Often in software = revenue typically under long-term sub contracts; value may be revalued

For IB, why is a sell-side process typically shorter than buy-side? - If woman desires = more facile gangbang - potential buyers big large one with nail into hot tub = Streater for maybe red with concentric cirlces

Once owner of of company proceeds with potential sale, easier to find find a group of buyers - vs many companies dippping toe in water = market research for potential targets

What is firm committment letter? - SHell/ George Warr shake hands Steve Cook + sent epistolary mechanism with conviction = i; erection rowing not sharke

Once strategic/ fin sponsor met with management team of target + submitted LOI = next term = firm committemnt from lender =

What is negotiated sale? - Pebles can only hold in this propective swallowers - Ross not cons: 1) House patient 2) one clap

Only handful potential buyers + most suitable when seller has particular buyer in mind Two benefits: - confidentiality + speed of close

How operating lease treated in DCF? - shovelled; future akin large back vs salaries - Large BA helper watch back large

Operating leases should be capitalised as habitually burgending the tenant with penalites and obligations which are more similar to debt obligations than expanse - tenants presentning lease oblgation on BS as lfor LT debt)

If startup bootstrappig, meaning? - important + through lining of this can wank

Operations funded entirely via cCF genreated by buinsess + out-of-pocket funds by entreprenur

What is catcj up claise? - Grey blind - Once 25% (not specifically), 51% non blindg (EPS important) until sahre until handshake

Outlined in a contract with LPs of a fund - once LPs receiving specific return, GPs recieing majoirty of profits until return proportion = GPs = catching up to orignal agreed-on spliut

How can forecast impled share price of company utilising EPS? - DCF valuation terminology - Binoculars important

P/E = share price/EPS = implied share price = EPS forecasted * P/E assumption

SHould two identical firms with differing leverage ratios trade at different P/E ratios? - Affirmaive: 1. Back greater Branson lower since income statement cream - Equity: eval large back vocation: sits on BS vs pie rising = augmentation

P/E multiples able to vary significantly as a result of leverage differences for companies which are otherwise identical - ceteris paribus, as company borrowing debt, EPS (denom) declining due to higher i/r expense Impact on share price depends on how debt utilised - if debt unsused and generate no return share price decline - if debt however utilsie to grow business = P/E theoretically rises

What is PIK interest? - term explain - Dirty bond clean bond terminoltgy concluding/ not important large back

PAid in kind Interest charged by lender which is accruing to ending debt balance rather than being paid in cash within current period

In past years, IPos ciritcised for leaving 'money on the table', what does criticism regard? - zuch cash to moon Nearly dad wealth vs writing under jessie J - eval: Anara key prior to Mentor cucumber in posession zuck cash

PHenom After IPO, shares surge + market cap can surge $50m-$80m 1st day = underpricing IPOs Eval: underpricing = how priority to sell shares listing - lower

Which BS items are adjusted to fair market value in a transaction? - Factories + IP borne borne FIG did in childood hence pen higher

PP&E + intangibles frequently carried at book values = hence written up

What is spin off and why completed? - Mum Scottish person and smoking person Ed sheeran penultimate album = lCothill this type of school with Dimitri zuck - eye over firm: zuck cash in pocket F/A Somerville fossil fuels

Parent separating division to create independent entity with novel shares Rationale - shrehodelr pressure to fivest = better off as standalone

From where do fin sponsors source capital? - Not pleased with Kwasi, Sam praying relative, Norges Dhitee Bill

Pension funds, insurane companies, SWFs

What are characteristics of shelf offering? - firm Abraham of Isaac start of pandemic nearly = not eggs in one basked - Eye over firm = Cucumber stammer= PLaylist name

Permitting companu to make offering within three-year period vs sell all in one sale rationale = market conditions could become more favourable (better)

What are preemptive rights? - Let the capitalists get fatter = mor ezuck, before Oxford A*AA to maybe Buffets

Permitting exisiting shareholders to purchase novel essuance prior to it being offered to other potential investors

What levers have positive/ ngeative impact on IRR of investment> - Ba watch but small = payday loan perception - Low capex/NWC - Unlikely -ve - Ba large watch

Positive - earlier proceeds extracted - dividend recap - FCF greater - Expansion multiples Negative - Receipt of proceeds delayed - FCF reduced - Contraction mullitples

How fair is statement that relative valuation relying less on discretionary assumptions of individuals? - Eval: - Chasm: not same read between lines donkey - Wallis-linked max intelliegnce for football = between lines donkety re aim of DCF + curve U shaped + tax type

Potentially inaccurate: - despite fact that comps analysis yielding different valuations from DCF, only due to inconsistency of implicit assumptions across both of approaches - when applying peer-derived multiple for valuation purposes, making implicit assumptions re future CF, cost of cap, + returns which made explicitly in DCF

What is maening if liquidation preference = capped participation preference?

Preferred shareholders able to share in liquidation proceeds at pro rata basis until total proceeds reaching particular multiple of original invesmnet + dividends accrued

When is red herring + when filed in SEC? - Exams first year = what every visitor Cam/Ox receiving; WOULD buffett = Yerevan re not sink

Preliminary prospectus = prviding prospective investors w/ ino re IPO upcoming

Difference between primary + secondary marekts? - not secondary = initial equities take it or leave it to not private - padlock chicken for rubber for price between buffets

Primary = when securities initially issued = Ipo - First time shares being offered to public Secondary = securities traded amidst investors i

What does private investment in public equity mean? - George Warr = work experience padlocks Apple by Axe selling - acquistion at sale Jessie J = non tatoo on forehead + ridiluous for this climate

Private placement of securities within a public company by investors accredited e.g. hedge fund - purchase made at discounted price = unregistered convertible

From perspective of entrepreneur, pros and cons of outside capital raising?

Pro 1. Sufficient funds to operate 2. Hire more talent 3. netter location Cons: 1. ownsehrop give up: becessary if IPO eventual

What is an IPO? - company warr = Oxford A*AA zuick to you and by in shiny mistake of zuck - wear condom for safe sex by FCA - SWOT BP: esspresso martini elevating Shovel larger through voting- buy and sell English

Process whereby a firm which is privately held offers its equity to the public in a novel issuance of stock - requirements met set by regular - Opporunity for firm to raise additional capital through offering shares via so-called primary-market channel

WHat is prop deal sorucing + how comparing to intermediated deals? - No trading: Where michael Chase and Cameron Red concentric circels + company - Lagrange and golf - Lily right now - Taxing - If between = hegemonic Aubrey - Czernin Austrian - list is long - Two forces Jessie J upward pressure: Schumpter + Kroll

Prop deal = initiated via cold outread/ exisitng relationhip between target and firm - pre-existing relationship = negotiations on friendlier terms - PE ship expects company not wanting to sell but so that if they do sell, PE shop is first frim called - Gruelling = hundreds of cold emails/ calls; arduous to convince owners to exit/ relinquish majority control over business Intermediated deal - Also known as intermediated auction - Led by IB with a notably extensive list of buyers potential - Likelier higher sale price due to a) greater competition among buyers b) sell-side bank attempting to extract higher sale price within auction process

Explain 'no-shop' providions in M&A deals? - SAfeguarding purhcaser of cucumbers during wayne guaro - Aubrey vs George Warr not what you did Heywood speakers + One GS network of demander of cucumbers with other cucumber demanders

Protecting buyer + exclusivity during negotaitons - sell-side rep prevented from seeking higher bids + leveraging current bid of buyer with other buyers

give example of drag-along provision?

Protecting interest of majority shareholders through enabling them to force major decisions e.g. exiting the investment

can you define fixed income + name examples? - brook of 1/28 yields + giving initial - fiscal loan, birth metro

Provide investors with stream of period i/r + return of principal Examples: - treasury bonds, certificates of deposit

Way ios a PIK toggle note? - What is effect of PIK? - Apple can keep bond holders waiting =Andrew long-duration bonds reduce this =Adam Shewry= cream

Provides with issuer of debt with option to defer i/r payment

What does CIM consist of?h demandera of cucumbers with 'I like it when you're all in' above Ratanon of firm - 1/2 max in reality - side - above Ratanon buyers and sellers of cucumbers Goldman now three

Providing buyers w/ in-depth overview of business offered - 20-50pg document with - comany profile - overview of market - business segments

What are bridge loans? - COmment cards specialists should shark Dad large back me not rowing no poss by gates shut transactionns - Squid game = no padlock handshake rowing writing epistolary from shark - Morgan stanley = hertford lending; Carly shift no

Provision of interim financing should the necessary debt committments not availabe by closig of deal = borrower not able to secure firm committment letter from lenders - IB provide bridge loan = preventing transaction from stalling

What does money market refer to + what is habitual maturity range? - Beats headphones airport Gussy + market = whale ticking-time loans + Lagre back; LIBOR market relates to this - Longest black lingerie = no elevator

Purchase + sale of large q/ of SR bonds + other debt instruments overnight Max Maturity = 13 months

What is liquidation preference?

Q. an investor must be paid at exist (after debt secured, trade creditors + other obligations of company) - multiple on initial investment habitually Liquidation preference = invesmtent amount * Liquidation preference multiple

What is dry powder in private markets? - shovel belonging to Sam grandfather which is Pam & Jim yet not given bread or fish = Kieran term - Force/area on PE firmsi.e. GPs overpaid in terms of carried interestwhat

Q. of LP capital which is committed yet unallocated = firm having on hand - Signifying pressure on GPs to deploy capital

Why may one company trade at higher multiple than another ? - Dwight belief supercilious integrals - pocket buffet shovel - Expansion future 45 vs 30s - Price tag of shovel subdued - important power engine more Bezos

Superior fundamentals - higher ROIC - growth prospects better - COC lower - CF generation more robust

If business undergoing LBo operating as intended, why does PE not fold on to investment for longer? - next gin and tonic over head elevating

Raise capital within fund structures = have to return funds to LPs before fundraising next round

Within mezzanine fianncing, what is euqity kicker? - augemnting borrowed for Travellers wife flat warren - 1. arrest = worker suck potenital - 2. Ability alomgside Zubair in Foodi: left warren zuck cashdriving zuckin palm - 3. Gay therapy: 1) rise not scholar Tesla 2020 2) ongoing in pocket Tobacco-stock feature

Raise returns for mezzanina investors 1. Warrants = similar to employee stock options 2. Co investment: investors may seek right to co invest equity alongside controlling shareholder 3. Converstion feature = 1) ability to participate in upside of common equity 2) continue receivei dividends/ interest

What is accounting treatment for finance leases? -How split between two BS sides? - How to value CF outflows store front street all inflows = large back - vs character different name = laura

Recognising PV of all future lease payments as debt + recognising alue provided by those future lease obligations as asset (PP&E) on the balance sheet of the lesee

What convexity used to measure? - Associated with value + Gold nothing

Relationship between price of bond + yield

From perspective of investor, what is interest rate risk refer to? - Andrew question thirty year: if padlock large watch BA helper blood = rise board game flaura and faunda altering = greater Churchill

Relevant for Bonds with longer maturities; if locked in to long-term bond = more risk that lending environemtn changes = higher yield

What is option pool?

Reservation of a particular % of shares 5-250% set aside for future issuance to vertain key investors, employees/advisors

If you had to pick, rather investt in firm selling B2C or B2b? - Sales sacha greater Penney = chance BA watch CHristian Grey mary jane spending time

Revenue quality highe b2b = probability of long-term contracts higher

Explain method 2 of revenue recognitiion for long term projects

Revenue recognise once the entire project completed

Explain method 1 of revenue recognitiion for long term projects

Revenue recognised on basis of % of work completed throughout said period

How is COE calcualted? - zuck board JPM vs Roths

Risk free rate + Beta*(Equity risk premium)

What is prepayment risk? - what you (shark) tried to do after Jemima

Risk lender taking when allowing borrower to paydown rematurely; necessary for lender to search for new borrower

If managment deciding to rollover equity, how to calc new ownership stake + proceeds at exit? - aggregate * % - owning/ (PE + not owning)

Roller equty = total euqity * % rollover equity Net ownership stake = (rollover equity)/(rollover equity + new equity)

What are no-vote common shares + which headline IPO brought into discussion?

SNAP in 2017 - most sharehodlers in IPO of snack not provided with voting rights = invetors enrirely hostage to managemt decisioins under corporate government proposed

What are anti-dilution protection calsuse?

Safeguarding shareholders after down round - conversion ratio remaining same to protect investmetn from losting value as result of additional dilution

What is divestitue = why completed? - Umbillical chord this is done raw mateirlas - Demand and supply not movement specialisation abs - key into padlock + football

Sale of business segment why? -allows parent to cut costs - shift focus to core business - unlock bvalue

When analysing viabiilty of undertaking LBO, how do PE firms estimating company's value in exit year?

Same EV/EBITDA multiple

How are seller notes M&A modelled? - large back

Same as debt

Example of when mid-year convention inappropriate?

Seasonabl companies - retailers = sales distrpoportionally in 3rd and 4th quarters

What is purpose of original issue discount feature of debt? - Carrot to buffets not MS - MS pays $98 onlu

Supposed to make issuance more appealing to investers = - if $100 being issued then lender only needs to pay $98

Difference between Seasoned equity offering + rights offering? - Since seasoned = more experience = more zuck cash; also known as not lead-off opposite - fifth amendemnt = current suck cashers Prada left to buy additional zuck cash at jessie J below jessie current = payment summer

Seasoned+ when company already public = issuing additional shares= follow-on Rights = providing exisiting shareholders with exclusive right purhcase novel shares at a price below current share price on pro-rata basis

Difference between secured and unsecured note? - supported by assets - Bobby axlerod yet as interest greater

Secured = debt is backed by collateral Unsecured: hedge funds willing to invest hence debt higher yield

What is SOFT + expected replaceent of LIBOR? - padlock day finacing reaction beaker - backed o/n pool money - funds with assets of Fiscal padlocks

Secured Overnight Funding rate = mesure of borrowing costs of cash which are collateralised by Treasurity securities

Various funding rounds in VC awalk through?

Seed = friends/ family.agencls Series A: early-stage investors = nitial institutional providing financing Series B/C: Expansion stage = early-stage venture firms Series D + onwards = Late-stage ; growth-equity shops

Given senior debt = cheaper, why not finance whole with senior debt? - Nicole outflow if cannot meet requirements additional back grow until PPF reach: two pies in face or three pies in face of Buffet does not desire - price tag jessie J greater in size as board game Argentina seventh more elevated

Senior lenders only lending up to a certain point = habitually 2-3x EBITDA - after said point only costlier debt available since risk of deault higher

To include in DCF answer?

Sensitivity analysis

Why do some portfolio copanies pay sponsor consulting fees? -specialised

Separative division within PE for in-house consultants

Why periodic acquisitions excluded from FCF calculation? - spotify black ... (video game) - failures in your life

Should only include cash outflows/inlows from recurring core ops

How does equity carveout differ from divestiture? - somewhat structuring - full circle, market with cucumbers family tree = 75% zuck cash circle only in woofer = not George Warr - smaller = Ditiri college gavel combined nee Michael + pins sticking in this - above majority zuck cash by Mum

Similarities = partial IPO Mechanism: - parent sells portion of equity interest in subsidiary to public investors - subsidiary new legal entity with separate management team + board after equity carveout complete Parent company still retains iusually 50%+ equity stake

What is undrawn committment fee linked with revolvers? - 1/2 fee structure Bobby - PE / yearly charge on q not Kelly Ryan

Small fee less than 1% = annual feee paid to lender - borrower charged annual fees on amounts unsuded = undrawn committment fee

What is secondary buout? - GP

Sponsor-to-sponsor deal = PE firm exisitng investment by selling to another PE firm

Would PE firm mprefer high growht/ stability of revenue? - which? - fr societal + large back

Stability given cap-structure considerations + employment of high leverage

How to determine what is suitable numeroator for multiple? - Eval: suppliers Serena williamns crying moment other - Whole vallue: line, margin, important to company - Branson: important to Zuck, accretive/dilutive

Stakeholders represented in denominator + numerator must match if EV = EBIT/EBITDA/FCFF If net income then FCFE, EPS used

Difference between subsidiary + affiliate firm? - tyranny of not this

Subsidiary: Parent company remaining majority shareholedr Affiliate: when parent only minority stake

Explain concept of beta - How should walk through market sizing board game of padlock vs cucumbers - extremes exaple - absence cucumber penis post ejaculation - Unity = mary jane cucumber penis afete ejac

Systematic (or non diversifiable) risk of a security relative to braoder market Beta = 0 no market sensitivity BEta>1 = high market sensitivity

Difference between systematic and unsustemtica risk? - Entire cucumber forum - vs only AstraZeneca or pharma

Systematic: - market risk = risk inherent to whole equity market Unsysmetic = specific to company or industry

WHy necessary to discount terminal value to rpesent?

TV representing PV of firm's CF in final year of first stage of explicit forecasting period before entering perteruity state - discounted to present as DCf predicated on what firm worth today, at current date

What is growth equity + how differ from earlier-stage VC investments?

Taking minitory equity stakes into high-growth companies beyond initial stages of starutp

What does multiple arbitrate in roll-up acquisition implyig? - concentric circles multiples lower vs pac man = around black hole disk important football identical M&A Group provides this prior EBIT ameliorations/ Newton = Penney price tag

Target habitually valued lower multiple vs acquirer hence deal accretive Cash flows post acquisition will be valued as same multiple as platform before operational integrations/ improtvmenets are made = incremental value

What is winner's curve in M&A? - acquired thorough ebay greater Solomon football field of on back

Tendency for winning bidder paid beyond fair value of target

Explain different classifications of term loans? - Gamer to Morgan Stanley/Barclays; kit near credit card - grade fail: bond not type for amenities gamer to Blackrock e.g. Sam Thomas/together pool of money - duration contract greater + lack repayment (specific term) of initial prior to maturation

Term Loan A: - loans which are syndicated to banks = packaged alongside an RCF Term loan B. C or D: Institutional term loan = loan facility which is syndicated to insitutional investrs such as mutual funds, insurance companies - difference = longer terms and no amortisation of principal before matuityt

When may PE firm prefer use of laons/ subordinates notes in LBO? - left to roght in chart from 400qs consider - optimise MS + BlackRock before diving no parachute - Savova = principal repayments - swallowing, cost lexicon = below

Term loans cheaper - PE firms = maxing q. funds instit lenders + banks providing before the raising of forms of financing which are riskier More flexibility since optional repayments permitted typically If firm active w.r.t. M&A - divestitures - Add ons , The restrictive incurrence covenants associated w/ subordinated notes of importance to consider!

Apart from covenants, what provisions able to be included to protect interests of lender? - Stammer = Shark squid say no without cash = pregngancy; Willmott within you not rowing writing

There may be considitons whic henable lender to renege on initial committemnt without potentially facing monetary consequencies = if unexepnded event occurs = provisions in committemnt letters

Why would company repurchase shares? what would impact on share price + fin statments be? - from camera to my own pocket Orsted - chasm Apple no = Self re Orsted asked to leave room - PH 7: EPs higher due to this, Dividend issuance impact

To move cash from BS to shreholders - difference from dividends = share repurchase removing shareholders Neutral = no impact on share price = whilst share count reduced, equity value also reduced by lower cash balances on company

Wghat is capitalisation table + what purpose serves in ealrystage companies + shareholders?

Tracking euqity ownership of company in terms of no. + type of shares as well as any particular terms e.g. liquidation preferences/ protectino clauses

What is habitual growth-equity investment differe from trad. buyouts?

Trad buyout = majorioty stake in mature/stable growth companies vs growth equity = minitory stakes in swiftly growing firms which are attempting to disrupt a certain industry

Three subclassifications of investmetn securities? 1. Tom, Rupert, Sacha 2. Stan Single Pringle = discount Puerto Banus = padlocks 3 .Catch yet softer until Brandi love padlcoks

Trading Available for Sale Securities Held-to-maturity securities

Walk through process of spreading comps ? 1. Eval: 2. Multi 3. FT tick tick tick cross of factual nature: brain broader hand on wheel football field 4. typing in Dad + bathtimewhat you do = you performing well 5. What do each morning Max in terms of intelligence 6. Max intelligence not stats to clothes store

Trading or transactions 1. Comparables universe 2. Relevant infor correct = to understand trends diriving valuation 3. Inputting financials + scrub for items non recurring 4. Calc multuples 5. Applying multiples to target

Out of DCF, COmps + trans, which yielding highest val? - Choking faciliates - wauter to half greater cucmcber selling buying jessie J

Trans usually = factoring in control premia - can be as great as 25-50% above market prices

How to calculate transaction value? - What are you paying for? Zuch cash

Transaction value = target offer value + net debt

What events taking place during managemnt roadshow? - Translocating Michael pointing wtih finger Blackrock e.g. Vangaurd, + Liability-driven investment - Creating cream in probelm

Travel to give presentations to instit investors = large asset manageets, pension funds Rationale? - generating interest for upcoming issuance

How to calc fully dilluted shares outstanding? - Yellen Suck cash Beakers - = Starbucks + electrosyer Farlow long-term bonds + electrolyser to search appartment

Treasury Stock Method = TSM Fully diluted no. shares outstanding = BSO + ITM options + ITM warrants

What is purpose of utilising mid-year convention in DCF?

Treating projected CF as if generated at midpoint of given period - without = assuming all CF received at end of year = inaccurate as CF generated throughout year

What is impact of target NOL's in M&A? - donkey by Pac man, Ryan Kelly fr yearly constrained - red concentric reduce offload cucumbers Josh William's discount

Two cases Assumeed by acquirer, while used capped aat annual limit Target NOLs alternatively can be used to offset seller's gain on sle

When can firm capitalise software dev costs under accrual accounting? - dual - TTL women's lacrosse not a real team for cloud = not external - Microsoft's laptop = market potential = Phil Canada border+ Lissy

Two stages: - application development stage for software which is intended for internal use - stage when software's tech feasibility = reached + able to be marketed

What are most common BS adjustments in M&A model? - Languages Durham: - Jack chen for startup: McDonalds eviscerated + alter - Solomon cucumbers football - Novel pac man large back generate (if with back paid for)+Red concentric circle on back large back no longer = skinny back - Pac man by problem

Two types: - accounting - funding Accounting: - Good will = eliminate and create new goodwill from model - PPE _ intangibkes: writing up assets to fair market vaklue Funding side: - debt = new acquirer debt create (if transaction partially funded w/ debt)+ elimitate target debt (habitually refinanced + reflected in new acquirer debt financing) - Equity: raise existing value of acquirer equity by value of new acquirer equity issued

Difference between unlevered FCF and levered FCF? - important from abs engine once lights on + oscar guy - line since no cream - formilar - important left once cash outflow to sharks = cream + large back factored in - To zuck cash - CF way - Skinner simpson

Unlevered = the CF generated from core operations once accounted for opex + investmnets - start with EBIT = unlevered since not including interest - FCFF = EBIt x(1-tax rate) + D&A - capex - change in NWC Levered = CF remaining after payments to lenders have been made since i/r and debt included - otherwise known as FCFE = cash from operations - capex = debt principal payment

If not deducated interest and mandatory debt repayments, what would we be measuring? - large back - what is DCF FCF calc?

Unlevered FCF Unlevered FCF yield = unlevred FCF/ Entry Enterrpise value

Difference between unlevered + levered DCF? - whole - vs zuck cash

Unlveredd Discounting unlevered FCF to arrive at EV dirctly Levred: arriving at eqv. directly

Purpose of sources and uses section? - You should ask as many as poss: firm Evan does not purchase? price? - Purchase auck cash = greatest ronaldo parter + bankers - Paying: banks + acpital of Alice Dad

Uses: answers q. What does the firm need to buy + how much cost = buyout of quiry most signifcant cost + fees paid Sources: where is funding = debt + euqity contributon of fin sponsor

What is commercial paper and which firms issue them? - Whale with apple re Moody's = LIBVOR = back labouring shovel reuqirements

Utilised by large corpoarations with high credit ratings as forms of SR borrowing in order to financ WC needs

Purpose of using multiples in valuaton? - Dad gym Acton light blue mirror football firm is certain not US - Permitting You to Wallis throughout eton with broad smallest to largest firms

Valuation multiples = financial ratoo reflecting how valuable company is w.r.t. a particular metric - enabling comparison wide range of company

For earnouts, why is EBITDA the most-common metric to use as target? - football

Valuations presented as multiple of EBITDA

How does DDM differ from DCF? -

Value of company = f (PV of future fividwnds) vs DCF value = f (PV FCF)

What is EV? - football of Ruslan = all suppleirs.= zuck cash retainers, Zuck types of shares owned + Amynta shark - shovel societal PH 7

Value of operation of a company to all stakeholders which includes sharehodlers, preferred sharehoders + debt lenders Cap-structure neutral

What is private placement? - briefcase elevating shovel problem zuck cash only to Blackrock and Vanguard - No market on non-private cucumber exchange

WQhen firm raising capital issuing shares only to a select no. of insitutional investors - not available for sale on public market

What is purpose of teaser? - Michelle - CV or double Lissy pages = not PE fin insists principal red lips - Lissy to hypothetical demandera of cucumbers: create assurâtes cream from demander of cucumbers for pen Ben doc + obtain proof reading with Salma

Waht is it? - one/two-page marketing document habitually put toegther by sell-side banks on behalf of client Marketing document to potential buyers; intention = garner sufficient interest from a buyer to sign NDA and receive CIM

What questions should ask when putting together peer group for trans comps? 1. Roths vs MAcquarie Arvind 2. Eye above firm = gibing vs receiving cucumbers 3. Michael an Jan and African American/ Austrian NFT sale

Was acquirer strategic or finacual What was rationale for transaction from both perspective of seller as well as biuer Was transaction negotatied sale/ auction?

What material found in M&A pitchbook? - Michelle - Lizzy word by Aubrey to LBO maybe red lips handshake 1. What Stephens sent you 2 CAGRs 3.George and RBC tweaking what 4. Between the lines Ethan valuation smallest to large

What is it? - Marketing document habitually used by investment banks to pircj potential clients to hire for particular transaction 1. Intro to IB 2. Prevailing market trend 3. Combined M&A model 4. Implied market range

If perfoprmaing diligence on CIM of potentail LBO invesmtents. Which questions aiming to answer? 1. Price neoliberal dildo/ stripper to ducks can be this 2. Ben van burden abs surprisingly non flabby/ earnout not required if this is certaintly case? 3. Ba rep with watch large Christian Grey

What value do products/services provide to cusomers/ IS mgmt team robust/ staying on in LBO ? Long-term contracts?

What is puropose of suyndicate of underwriters? TT - collection Dennis Diaz, buying new problem of padlocks for Wayne Guoro price + groupie padlocks to winner-takes-all industry buffets through trip on road - Nutella on toast of board game = optimisation luck entire problem = market to non private

What? A group of IB -= syndicate which will purchase novel issuance of securities for negotated price + promote securities to network of investors via roadshow Purpose 1/ Disseminating risk across several = maximises p(entire issuance) = sold to public

What is the purpose of seller notes in M&A - With cucumber = share of Jessie J in large back - carrot aid principal vs agent energy

What? WHen seller agreed to receive % of purchase price in debt form INcentive for seller to help ownership transition

What is purpose of working cap peg negoation M&A? - just enough under maintenance = 0 = after draw bridge up - No person with cucumbers important in pocket above necessary

What? - Negotiated adequate level of NWC necessary post closing of a deal From buyer perspective, purpose = prevent seller taking cash beyond requirements of NWC

Habitual components of letter of intent? - Michelle - demanded of cucumbers yes next Simba Mufasa swallowing - first premium: Jessie J, Plato thinking, + Elon Musk MS still cannot sell

What? - when buyer proceeded w/ next steps in potential acquisition = LOI next tem - letter w/ initial terms; purcahse price + form of consideration + planned sources of financing

When would value business using P/B ratio? - FIG doing in childhood butterly catches significant percept of inflaiton-adjusted football field - Jemima internship as laura + lack large component football fields drawn up again = similar to selling + buying of cucumbers

When book value capturing substantial % of real value = commercial banks given most of assets + liabilties revalued frequently; akin to market values

What are circularities in fin models? - kletka in notebook to se

When cell refers to iteself

What is equity investmetns method?

When company owninng 20-50% of another firm

What are share buybacks + under which circumstances most appropriate? - Ryan Kelly Kieran term re;urchse - Term important process history: meat soft (Rupert approaches me Orsted cash)/ draw bridge coming down cucumber sell and buy - Less on second + mirror Yellen Cocaine on picture - If cumumber buying selling below not growth stocks = cecline denom + Jones teaching Lagrange rising= hlaf full excessive Roths re not present or past after tax pie expansion

When company utilising cash on hand to buy back some of shares Mechanisms: tender offer (directly shareholder approach) / in open market Repurchase = Cash outflow on CFs + reflected on the treasury-stock line items in BS Right time = when believing market undervaluaing shares = effect = higher EPS and potentially higher P/E - may be interpreted as positive signal by market = optmistic re fitire earnings growht

What is capital call in PE? - Big O asking no brains for cash

When invesmtent deal in last stages + committed capital from LPs funding acquisiiton - i.e. GPs requesting from LPs = drawdown = funds which they have committed to the fund

What is consolidation method?

When parent company over 50% ownership

What is reverse merger + benefits? - think SPAC: George warr swallow generic form not George Warr - not George Warr problem zuck absence of curves structuring

When privately held comapny - merger with another company already public - public entity now able to issue shares without costs linked to IPOs

How does tender offer differ from merger? - A*AA demand cucumbers proprotion/ entirety zuck cash price tag greater - one room living = bank account can be AWyne Guoro

When public company receiving tender offer, acquirer offering takeover bid to purcahse some/all shares for a price above current share price vs merger = jointly negotiation

What is staple finacing + what type of lender providing it? - Cucumbers possessing AUbrey = Dad for our family large back vs in palm back large cucumbers possession

When sell-side IB able to provide debt yet rather than holding onto debt= selling on

What is commercialisation stage?

When value propostion of startup + potential for product-market fir validated = institutional investors contribute capital

What is illiquidity discount? - Lack of Streater interview/ Farlow key idea = not entrance - sale vs waste management George

When valuingprivate companies = no optionality to exit investments quickly - discount when trading comps

What are some active-defense measures to block a hostile-takeover attempt? - 1. Ripped small Ser Cristen = BFG swallows 2. ripped small messenger = not inside voice pac man swallows slice 3. swallowing eye over firm Virgil: swallowing snapshot fat 4. Video game Virgil: reverse 5. Recyclable protection Virgil: market for buyers zuck cash cream extra

White knight = friendly qcuirer purchsaing target White squire: outside acquirer steps in to buy stake in firm to prevent takeover Acquisition strategy defence: target making acquisition so BS less attractive Pac-Man defenc: when target aims to acquire hostile acquirer Greenmail defence: when acquirer gaining substaintial voiting stake+ threatening takover unless target repurhcasing shares at notable premium = target forced to resist premium by shares purchasing at premium

Possible for asset to have negative beta?

Yes = gold = inverse relationship with market - when stock market going up, price of gold habitually decreasing

What is unitranche debt + benefits? - Prius of Second type + Alex - Client of loan shark X app

blended hybrid of subordinated debt/senior debt Benefit = enables borrowers one-stop-shop financing

Would you prefer $100 in revenue or cost synergies? - Zachius only - Multiple vs Zachius

cost = all cost savings (adjusted for taxes) flow through to bottom line whereas revenue synergies have associated costs which reduce bottom-line benefit - EBITDA margin consider vs 40% tax rate only applied to cost

How would you compile data to perform transaction comps? 1. Transaction: shout it from rooftops pull opposite but button prisoner at end of sentence 2. combination handshake 3. Wait in line sanding wood with PC similar

deal-accountemnt press release Merger agreement Proxy filings

Why may company prefer to repurchase shares over dividend issuance? - Zachuus left and right: at Jan levinson + Orsted self - Other: bottom line/no.shares + fiancning more expensive - Accenture J throw up = greater frequent = other = antagonism = robinsons

double taxation when firm issues dividend; income taxed first at corp level and then at shareholder level Share repurchase = increase EPS + raise share price potentially Stock-based comp increasingly commmon hence share buybacks potentilly counteracting dilutive effect of said shares

What is LBO? - Dad AON Man U = company swallow Parent company in equity carveout = jessue J largest to smallest large back = D2C + certificate Control = Casson important producting 1) connel 2) CD&R type of LBO 3) Laura divestiture Sunset - Hand + two more Sale - House - Margot/stratgic 1/5-1/4

financial sponsor acquiring firm w/ majority of purchase price funded via use of a variety of debt instruments such as bbonds and laons Once control: PE aim to streamline with aim of making firm more efficient at CF generation s.t. ability pay down debt burden - a) restructuring b) op improvemements c) asset sales Inv horizon? - 5-7 years After which exit: - IPO - Sale to fin sponsor/ strategic Aim returns: - 20-25%

When would prepayment optionatliy of certain debt tranches unattractive to lenders?

prepayment disallowed since more interest colected in future, potentially

What type of sectors would have high/low betas? - Gully

useful q/ would consumers demand product in receetion If Beta>1 = industy cyclical and more volatile = automobile and construction = new cars and new homes purchased only if econ growth strong Beta less 1: s consumer products slling personal hygiege/ healthcare

Difference among vertical, conglomerate/ horizontal merghers? - up down: praying variety football Danaerys Jack chemistry joke - Raise what you desire over not demand Danaerys rbreaks thsse = double markup issue gone - Reliance: not all eggs in one Country of Eton Anne - right left: companies You and Alec trials: where should stand tennis + not jogging - not a real degree ben you Shontelle + not why M&A you desire

vertical: Two or more firms serviing differing value chanain; greate rcontorl over supplu chain = inefficiencies eliminated Conglomerate = muliptle firms combination in unrelated industries for purpsoes of diversification e.g. berkshire Hathaway Horizontal = firms directly competitng = T Mobile Sprint - benegit = raises geo coverage + rise in pricing power

Why may higher average selleing price/average order value nor always bettwe?

whwn priving lower lever for growuing revebue, product overly expensive reduces no. potential buyers as product out of price range

COmpany aquires machine for $5m and has since generated $3m in accumulted depreciation. PP&E has fair market value of $20m. Under GAAP, what is value of PP&E on BS? - Branson Goodhart curve

$2m = firms must carry value of assets at net historical cost

What is interest cov. ratio? - indep of cap structure - denom vs numerator

Ability of a company to over i/r payments utilising CF - EBIT/interest

IS negative working cap negatiev? - Eval: - Ar low: Casson graph kroll Zachius from people + warehouse kroll cart wheel + do not want to depart with cash - ASh

Depends - could stem from = efficient in revenue collection = swift turnover of inventory + delaying payment to suppliers - could also mewan liquidity issues

Is EBITDA good proxy for op CF? - Why Warren buffet not pleased eval: toiiling shovel - Also no Zuck cash comp/ accenture person

Does not capture full cash impact of capex although does add pack D&A or changes to WC - stock-based comp also not adjusted for

How to calculate debt-service coverage ratio + what measure? - FICO = to see no-one at Eton had this type of card - Warren hates capitalpost investing/ need to cream + need to either way

Gauge of creditworthiness DSCR = (Ebitda-capex)/(Interest expensive + mandatory principal repayment)

Most common margins for profitability? - Ewww: Ben sketching in Bird once workers/oil - Core engine: Shara recommends = boarding school fr no societal - Branson - Warren dislike/Kroll

Gross margin = gross profit/ revenue - profit remaining after COGS Op margin - EBIT/Revenue = indep of cap structure Net profit = net income/ revnue EBITDA/Revenue

What are Profitability ratios example?

Gross profit

What does accounts receivables turnover measure? - Zachihus task three inches CA from parrot can be in vet

No. times per year company ableto collect average accounts receivable from customers Revenue/ (average accounts receivable)

What are ratios would examine to perform credit analysis? - Ash - How large back/ liquid chemistry - abilituy to meet debt payments =lagrange - Branson

Liquidity Leverage/solvencuy Coverage Profitability

What is proxy statement? - Line standing to see Mila Kunis BJ warren buffet - ; on door select anal or pegging Warren

NEcessary to be filed before shareholder meeting = soliciting sharehodler votes

What is cash conversion cycle? - Havitually 28 in a period cycle - in warehouse: Kroll into important

NO days taken company to convert inventory from sales to cash

Walk me through income statement - After gross - Giacomo free kick not linked strict to sale - S: Lissy - G: Sam family - A: Katie Zhang billions - Pill - no buffet - car eat up: not imp fall in two laura = a) Bob the builder role + b)handsome IEA Calc op - Remember what if firm holds corporate bank account and suddenly rise in rates Zacchius: Ammar night out = for FIG Mike term

Net revenue = top line less COGS = costs linked to producing revenue (e.g. lemons for lemonade) Gross profit less SG&A = opex indirect not directly associated wtih product being sold (e.g.utilities) - Sellling: e.g. advertising - General: unitilities, insurance - Admin: Salaries less R&D = developing new products EBITDA = Gross profit -SG&A - R&D D&A = non-cash annual expense estimating reduction in value of intangible assets EBITDA -D&A = EBIT less interets - the i/r expense from debt net of interest income from investments EBT - A tax liability which is recorded by a firm for book purposes notably Net income

Bad for company if retained earnings negative? - Eval: anscombe long har Dad lax varsity will happen vs Ben Bird - Spurt = pill of great size

Not necessairly - If more accounting losses than profits generated - often case for startups= high R&D

When using metrics e.g. ROA + ROE, why use averages in denom? - females period vs photo

Numerator usually from IS, denometrator from BS - Income satement = period vs BS = snapshot

Why are values of intangible assets not reflected on BS? - MUm saying you are handsome not = not recruiting someone who looks and sounds like you Dad docs

Objectivity = only unbiased/verifiable data able to be used in fin filings, rather than subjective measures

How to foreacse PP&E and intangiubles - Skelley not backwards if pushed = Beginning of = actual + shovel - car swallowing Seb mallaby - beginning of = in actuality + mcdonalrds brand swallow - debt repayment

PP&E = roll-forward schedule: EOP PPE = BOP PPE + capex - deprecitations Intangibkle asset roll forward - EOP Intangibles = BOP intangibles + intangibles Purhcases - Amortization

Why rise in accounts payable = rise in CF?

Rise in AP = company = delaying paymnets to suppliers/ vendors and cash currently in possession

How would raising capital via a share issuance affect EPS?

Share count rises = reduces EPS Eval: share issuance generates cash = hence higher i/r income net income - counter eval: negative dilutive effect of share issuance likelu outwieghs

What was impact of COVID-19 on NOLS? - fingers on hand from C block to starting university

Under CARES act, NOLS arising 2018-2020 = able to be carried back for max of five years

Walk me through CFS 1) Tell manager issue 2) tell someone else to tell manager Being shy more common 1) Bottom line - + Accenture likely - engine running 2) Greatest = new factors - gobbling or coal too 3) Large back or zuck - - cream - Treasury stock source - tobacco 4) corkscreew

Two methods of organisation: a) direct (only cash trans utilising) b) indirect Indirect more common = three sections i) CFO: - net income - PLus: non-cash expenses e.g. stock-based comp and D&A - less: change in NWC ii) CFI: - Less: capex (habitually outflow largest) - less: business acquisitions/divestitures iii) CFF: - Plus: cash raised from debt or equity - Less: cash utilised for repayments of debt - Less: cash for share repurchases - Less: cash paid out dividends In sum = net chnage in cash - ECash balance = beginning cash balance + net change in cash