Use this model to derive ‘target’ enterprise value multiples that are consistent with specified value drivers, including measures of growth, return on investment, margins and capital intensity. The model is based on an underlying 2-stage DCF methodology. We explain its derivation, the key assumptions and how to select appropriate value driver inputs.Continue reading “Interactive model: Target enterprise value multiples”
Do you invest in both IFRS and US GAAP reporters? If so, then in recent financial statements you might have noticed differences in the accounting for leases. This could result in a significant lack of comparability in key metrics.
Both IFRS and US GAAP now better reflect the economics of leasing and so the old adjustments to capitalise operating leases are no longer necessary. Unfortunately, you now need to make other adjustments to get comparability between US and IFRS reporters. We explain the adjustments and provide an interactive model to help.Continue reading “Operating leases: You may still need to adjust”
This interactive model is designed to help investors understand the differences between US GAAP and IFRS accounting for lease obligations and convert US GAAP figures into the equivalent under IFRS 16.Continue reading “Interactive model: Convert US lease accounting to IFRS”
EBITDA up, EBIT up, EPS? … well it depends. The impact of lease capitalisation under IFRS 16 on key company metrics in 2019 is complex and depends on several variables, including transition options chosen by companies.
We highlight what you should look out for and present a simple interactive model to help you understand the effects of IFRS 16 on profitability, growth rates, return on capital and leverage.Continue reading “Leasing – Are you prepared for IFRS 16?”
Are you trying to identify what is ‘priced in’ to a current stock price or work out a terminal value in a DCF analysis? A target valuation multiple calculation may be the answer. We present a simple interactive model.
Many dismiss valuation multiples as being too simplistic; however, multiples are just DCF in disguise. You can derive a price earnings ratio with the same value drivers as you would use in a discounted equity cash flow model.Continue reading “Price earnings ratios – DCF in disguise”
For some companies the change in revenue recognition due to the adoption of IFRS 15 in 2018 has resulted in a material change in reported revenue and profit. However, your analysis needs to go beyond the transition effect and also consider the impact on future growth.
We illustrate how your forecast of profit growth can be impacted by IFRS 15 using a simple interactive model.Continue reading “IFRS 15 revenue recognition may impact forecast growth”