Term

Definition
revenue less variable costs( DM,DL,VOH, VS, etc.) 


Term
BE analysis (units and $) 

Definition
BE units: (Fixed costs /CM per unit) BE $ : (fixed costs /CM%) 


Term
Contribution margin analysis 

Definition
ensure to compare CM of product over revenue stream cycle as upfront costs may be incurred early but earn residual income into the future 


Term
Buy vs Leases determination 

Definition
calculate NPV of each option to determine which option is the cheapest
buy considerations (cost, selling, maintenance, tax shield)
lease considerations (after tax lease payments * discount rate) 


Term
Buy vs leases qualitatives factors 

Definition
Always need to discuss: impact on covenants cash flows (leasing lessens upfront cash burdens) leasing easier if the company has trouble obtianing financingleasing protects against severe decline in asset value possible tax advantages: no capital lease for tax purposes so cash payments would be deductible, but not CCA purchasing asset may provide more flexability (ownership) 


Term
FNCE quant wording in case 

Definition
see one note for great appraoch 


Term

Definition
Going Concern Company? Yes: 1 adjusted net asset 2 capitalized earnings 3 capitalized cash flows 4 discounted cash flows Not Going Concern: 1 asset based liquidation approach 


Term
When to use capitlized cash flow/ earnings approach 

Definition
Going Concern, active operating entity, historical cash flows indicitive of future performance  are there differences between earnings and cash flows? yes use cash flows, no use earnings 


Term
When to use discounted cash flow valuation? 

Definition
Going Concern, active operating entity, historical cash flows not reflective of future operations 


Term
When to use adjusted net asset valuation? 

Definition
Going concen, company not active operating entity 


Term
When to use asset based liquidation approach? 

Definition
Company not going concern 


Term
Adjusted net asset approach 

Definition
adjust all BV of assets for FMV and subtract liabilites for adjusted net assets balance deduct latent taxes/ selling costs deduct foregone tax shield 


Term
Capitalized earnings appraoch: 

Definition
1 EBIT 2 Normalizations +/ =3 normalized EBIT * average past years results and come up with high and low 4 less taxes 5= After tax cash flows 6* earnings mutiple 7= capitalized earnings 8 add redundant assets 9= EV 10 less net debt 11=equity value 


Term
Capitalized Cash flow set up 

Definition
1EBITDA 2normalizations 3=normalized EBITDA 4 compute average and wieghted average over past to determine high and low values 5 less taxes 6 less sustaining CAPEX (net of tax) 7= after tax cash flows available 8= apply cash flow multiple 1/ (waccg) 9=capitalized cash flows 10 add PV of tax shield + redundant assets 11= EV 12 less net debt 13= EQUITY VALUE 


Term
Discounted Cash Flow Set up 

Definition
1EBITDA for future forecast yeatrs
2 normalizations
3 normalized EBIDTA
4 less taxes
5cash flows
6: less CAPEX and WC requirments if any
7 free cash flows available
8 last year expected to be steady and idicative into future on steady growth apply mutiple (gordon growth) to FCFn *(1+g)/(rg)
9 NPV all values to determine valuation



Term

Definition


Term
Capitalization multiple with capitalization rate given 

Definition
(1/cap rate)= cap multiple 


Term
Investment in company analysis (quant analysis) 

Definition
Consider FS adjustments first  time to recover investment = cost of project / annual inflows IRR:undiscounted cash flows >compate this to borrowing rate NPV LOC considerations Bank covenants: consider cimpliance with covenants Ensure to mention assumptions and risk if things do not go as planned (Qual for FNCE wording) 


Term
Investment in company qualitiatve analysis 

Definition
SWOT analysis key decisions making factors: projects, litigations, bank agreements, quant anlaysis, conflicting objectives 


Term

Definition
the required expected return acts as the discount rate. In other words, discounting is merely the inverse of growing. 


Term
Decision to sell property and lease or do not sell it. How to analyze this 

Definition
calculate NPV analysis assuming that you sold it and are making leases payments. If positive NPV then sell, if negative don't sell. 


Term
things to consider in NPV for sell and lease vs don't sell 

Definition
1selling price + 2 commision  3 lease payment  4 tax savings on lease + 5 tax on capital gain  6 tax on recaputre  7 tax on CCA tax shield lost  


Term

Definition
estimate and move on > boom 20% 

