Brian DeChesare

SEPTEMBER 13, 2023

The company still pays interest on the full $1000 and must repay it upon maturity, but you can buy the issuance at a steep discount because there’s a significant chance of default (see: book value vs. market value vs. face value ). A sharply declining stock price does not necessarily mean a company is “distressed.”

Equity 103

Equity Banking EBITDA Start-ups 103

Class VI Partner

JULY 28, 2021

Start with this exit checklist. Adjusted Net Book Value Adjusted Net Book Value is the Book Value of a business that has been adjusted to reflect the current market value of the assets and liabilities of a company. Exit Checklist. Want to get a sense for what it takes to sell your company?

Book Value 52

Book Value Equity Enterprise Value Fair Market Value 52

Musings on Markets

NOVEMBER 10, 2022

In the figure below, I trace out where operating, capital and financing expenses show up in the three financial statements: Operating expenses become part of cost of good sold or other operating expenses (like SG&A and adverting costs) in an income statement, and are key inputs in determining operating income. billion.

Finance 97

Finance Start-ups Equity Equity Financing 97

Valutico

MAY 6, 2024

Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value. to its market value.

Discounted Cash Flow 52

Discounted Cash Flow Precedent Transaction Analysis Weighted Average Cost of Capital Comparable Company Analysis 52

Musings on Markets

FEBRUARY 15, 2023

To set the stage, I will start by laying out the differences measure of earnings that reported on an income statement: At the top of the profit ladder is gross income , the earnings left over after a company has covered the direct cost of producing whatever it sells.

Start-ups 52

Start-ups Equity Risk Premium Risk-free Rate 52

FE International

DECEMBER 31, 2021

At FE International we value and broker the sale of internet businesses with a wide range of monetization strategies (e.g. up to >6x (more on that later) and seen more than a few interesting valuations devised by buyers! billion up to $6.8 At the time of writing, Facebook’s enterprise value is $527 billion.

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Business Valuation Precedent Transaction Analysis Start-ups 52

Musings on Markets

MARCH 8, 2023

Thus, the notion that a company that pays dividends is viewed as a failure strikes me as odd, since just farmers seed fields in order to harvest them, we start businesses because we plan to eventually collect cash flows from them. Viewed in that context, dividends as just as integral to a business, as the investing and financing decisions.

Dividends 102

Dividends Start-ups Corporate Finance Finance 102

Musings on Markets

FEBRUARY 27, 2023

That may reflect the concern that once a person or entity starts borrowing to fund its needs, it is easy to overuse debt, and risk its wellbeing in the process. In fact, that may explain why firms that trade at low EV to EBITDA multiples are more likely to become targets in leveraged buyouts (LBOs) or leveraged recapitalizations.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

JANUARY 31, 2024

In this post, I start by looking at the end game for businesses, and how that choice plays out in investment rules for these businesses, and then examine how much businesses generated in profits in 2023, scaled to both revenues and invested capital. The End Game in Business If you start a business, what is your end game?

Equity 80

Equity Book Value Start-ups Corporate Finance 80

Brian DeChesare

JUNE 1, 2022

But over time, trends like market liberalization, deregulation, the shift to renewables, and the ESG religion “movement” have shaken up a sleepy sector. We’ll get into these fun developments, but I want to start with the basic definitions: Power & Utilities Investment Banking Defined.

Banking 98

Banking Equity Book Value Capital Structure 98

Musings on Markets

JANUARY 6, 2023

In my last post, I talked about the ritual that I go through every year ahead of my teaching each spring, and in this one, I will start on the first of a series of posts that I make at the start of each year, where I look at data, both macro and company-level. That is not true!

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Musings on Markets

JANUARY 5, 2024

First, these categorizations were created close to twenty years ago, when I first started looking a global data, and many countries that were emerging markets then have developed into more mature markets now. Standard Deviation in Equity/Firm Value 2. Book Value Multiples 3. EBIT & EBITDA multiple s 5.

Dividends 105

Dividends Risk Premium Equity Book Value 105

Musings on Markets

FEBRUARY 4, 2023

The Lead In As noted in the introductory paragraph, I start from a position of ignorance about the Adani Group, and it thus made sense to fill in that gap. First, they are infrastructure businesses , requiring large up-front investments and having long gestation periods, with regulatory and government oversight.

Start-ups 100

Start-ups Market Capitalization Equity Marketability 100

Musings on Markets

JANUARY 10, 2025

It is the end of the first full week in 2025, and my data update for the year is now up and running, and I plan to use this post to describe my data sample, my processes for computing industry statistics and the links to finding them. Standard Deviation in Equity/Firm Value 2. Book Value Multiples 3. Return on Equity 2.

Risk Premium 119

Risk Premium Dividends Start-ups Corporate Finance 119

Musings on Markets

FEBRUARY 23, 2025

When the debt is within reasonable bounds (scaling up with the company), a company can borrow money, and not lower its ratings. We can start with dollar value debt, with two broad measures gross debt , representing all interest-bearing debt and lease debt, and net debt, which nets cash and marketable securities from gross debt.

Equity 75

Equity EBITDA Risk Premium Gross Debt 75

Musings on Markets

FEBRUARY 6, 2025

The results, broken down broadly by geography are in the table below: As you can see, the aggregate market cap globally was up 12.17%, but much of that was the result of a strong US equity market. I am no expert on exchange rates, but learning to deal with different currencies in valuation is a prerequisite to valuing companies.

Risk Premium 67

Risk Premium Start-ups Enterprise Value Equity 67