Self Study | The Marquee Group

CAPDEP1: What are capital expenditures?

CAPDEP2: In what section of the Cash Flow statement are capital expenditures recorded?

CAPDEP3: How will capital expenditures appear on the balance sheet?

CAPDEP4: Are fixed assets on the balance sheet recorded at cost or fair market value?

CAPDEP5: How do fixed assets get expensed on the income statement?

CAPDEP6: Is depreciation always shown separately on the income statement?

CAPDEP7: If depreciation / amortization is not shown on the income statement, where can we find these figures?

CAPDEP8: How does the balance sheet carrying value of fixed assets change over time?

CAPDEP9: Does land get depreciated?

CAPDEP10: How are intangible assets different from fixed assets?

EPS1: What is EPS?

EPS2: Why is EPS important?

EPS3: What are the different types of EPS that companies are required to report?

EPS4: What is basic EPS?

EPS5: What is diluted EPS?

EPS6: What are examples of dilutive securities?

EPS7: How do you calculate diluted EPS?

EPS8: Why do we use the weighted-average number of shares outstanding in the EPS calculations?

EPS9: How does a company calculate their weighted-average number of shares outstanding?

EPS10: What is the effect of Stock Dividends and Stock Splits on EPS?

EPS11: Do we include anti-dilutive shares while calculating dilutive EPS?

ENTV1: What is meant by Enterprise Value?

ENTV2: Why do investment bankers like Enterprise Value?

ENTV3: When do we use Enterprise Value in ratios?

ENTV4: What is EBITDA? Why do investment bankers use it and how do we calculate it?

ENTV5: How do you calculate Enterprise Value?

ENTV6: What do you include when calculating the total debt number?

ENTV7: How do we calculate the value of debt and preferred shares?

ENTV8: Should a pension liability be included in the calculation of Enterprise Value?

ENTV9: What is net debt?

ENTV10: Why do we add noncontrolling interest to a company’s Enterprise Value?

ENTV11: Why don’t we just subtract some of the parent company’s EBITDA to get a consistent EV / EBITDA ratio?

ENTV12: Where can we find the NCI amount?

ENTV13: Would you ever calculate enterprise value without adding in NCI?

ENTV14: Why do we deduct long-term investments when calculating enterprise value?

ENTV15: Would you ever calculate enterprise value without deducting LTIs?

ENTV16: Where can we find the LTI amount?

ENTV17: How do you go from a company’s Enterprise Value to its Equity Value?

ENTV18: What happens to a company’s enterprise value when it pays a dividend?

EQV1: How do you calculate equity value?

EQV2: What are basic shares outstanding?

EQV3: What are fully diluted shares outstanding?

EQV4: When do we use Equity Values in ratios?

EQV5: What are some problems with Equity Value in ratios?

FDSO1: What does "Fully Diluted Shares Outstanding" mean?

FDSO2: What is fully diluted shares outstanding used for?

FDSO3: How is fully diluted shares outstanding calculated?

FDSO4: Where can we find the basic number of shares outstanding?

FDSO5: How should we adjust for stock options?

FDSO6: What is the Treasury Stock Method?

FDSO7: How to adjust for Stock Warrants?

FDSO8: How to adjust for Restricted Stock Units, Performance Stock Units and Director Stock Units?

FDSO9: How to adjust for Convertible Debt?

FDSO10: How to adjust for Convertible Preferred Shares?

TAX1: What does the Income Tax Expense line on the income statement mean?

TAX2: What types of items cause timing differences?

TAX3: What are the components of Income Tax Expense?

TAX4: What is Current Tax Expense?

TAX5: What is Deferred Tax Expense?

TAX6: What happens on the Balance Sheet?

TAX7: Which accounts create Deferred Tax Assets vs. Deferred Tax Liabilities?

TAX8: What about Tax Losses?

TAX9: What is the valuation allowance on DTAs?

TAX10: What is an Effective Tax Rate?

LTI1: What is a Long-term Investment (or “LTI”)?

LTI2: How do you know if a company has LTI?

LTI3: How does the value of the LTI change over time?

LTI4: Does LTI have an impact on the Income Statement or Cash Flow Statement?

LTI5: Do you adjust Enterprise Value for LTI?

LTI6: By removing LTI from Enterprise Value, do you ignore the value of any LTI of a target company?

MA1: What are the major accounting issues that arise as a result of Mergers and Acquisitions?

MA2: How do the target’s financial statements get accounted for on the acquirer’s financials?

MA3: When does the acquirer start to include the financial results of the target in its own financials?

MA4: How does this differ from “Pro Forma” financial statements?

MA5: What is “purchase price allocation”?

MA6: Why does the FMV adjustment only happen in the M&A deal?

MA7: What kinds of balance sheet accounts can be subject to FMV adjustments? What about intangible assets?

MA8: Do these new intangibles need to be amortized?

MA9: What is goodwill? How does its value change over time and how do these changes get reflected on the financial statements?

MA10: What is the difference, from an accounting perspective, if a purchase is for a target's assets vs. its equity?

MA11: How can a deferred tax liability be created through M&A?

MA12: What adjustments need to be made to the acquirer’s balance sheet to consolidate the target?

MA13: How do we deal with transaction fees?

MA14: What is accretion / dilution?

MA15: How is combined EPS calculated?

MA16: What are some helpful "rules-of-thumb" with respect to EPS accretion / dilution?

MA17: What is "post-transaction analysis" and what is it used for?

MA18: What multiples can be used to determine pro forma share price of acquirer?

MA19: What is the bootstrapping earnings effect in an M&A deal?

MA20: Assuming no synergies, what is the theoretical pro forma P/E multiple after an acquisition is completed?

MA21: When doing a post- transaction analysis, at what multiple should the pro forma company trade?

MA22: How is a sale of a business or subsidiary accounted for?

PRO1: What are pro forma multiples?

PRO2: What are some common reasons why valuation multiples should be adjusted in a comparable analysis?

PRO3: What exactly needs to be adjusted within the multiple?

PRO4: Where do you find the amounts to be used in the adjustments?

NCI1: What is Noncontrolling Interest?

NCI2: What is a subsidiary?

NCI3: How is NCI Calculated?

NCI4: What is Control and why does it matter?

NCI5: Where does NCI appear on the Cash Flow Statement?

NCI6: Where does NCI appear on the balance sheet and how does it change?

NCI7: Is NCI always a constant percentage of Net Income?

NCI8: Do you adjust Enterprise Value for NCI?

NRI1: What are non-recurring items?

NRI2: Why do non-recurring items matter?

NRI3: When should we make adjustments for non-recurring items?

NRI4: Where would you typically find / locate these items?

NRI5: What tax rate would you use to “tax-effect” all adjustments?

NRI6: What is the accounting treatment for Non-Recurring Items?

TIME1: What does LTM mean? How do you calculate LTM?

TIME2: What does calendarizing mean? How do you make the adjustments?

TIME3: Which financial metrics should be adjusted? Why?

TIME4: Which items should not be adjusted? Why?

TIME5: What is the difference between a fiscal year and a calendar year?

WC1: What is working capital?

WC2: What is cash accounting?

WC3: What is accrual accounting and why is it needed?

WC4: How do the financial statements reconcile the difference between accrual accounting and cash flows?

WC5: Should cash balances and short-term debt be included as working capital accounts?

WC6: What are some common working capital accounts?