Financial Modeling and Valuation -- Contents -- Preface -- The Walmart Case Study -- How This Book Is Structured -- Part ONE Financial Statements and Projections -- Chapter 1 The Income Statement -- Revenue -- Cost of Goods Sold -- Gross Profit -- Operating Expenses -- Other Income -- EBITDA -- Depreciation and Amortization -- EBIT -- Interest -- EBT -- Taxes -- Net Income -- Non-Recurring and Extraordinary Items -- Distributions -- Net Income (as Reported) -- Shares -- Earnings per Share (EPS) -- Walmart's Income Statement -- Revenue -- Getting to EBITDA -- Digging up Depreciation -- Cost of Goods Sold -- Gross Profit -- Selling, General, and Administrative Expenses -- Other Income -- EBITDA -- Beyond EBITDA -- Depreciation and Amortization -- EBIT -- Interest -- EBT -- Taxes -- Net Income -- Non-Recurring Events -- Net Income (after Non-Recurring Events) -- Distributions -- Net Income (as Reported) -- Shares and EPS -- Income Statement-Making Projections -- Revenue -- Cost of Goods Sold -- Operating Expenses -- Depreciation and Amortization -- Interest Income -- Taxes -- Non-Recurring Events -- Non-Controlling Interest -- Shares -- Basic Shares Outstanding -- Diluted Shares Outstanding and the Treasury Method -- Earnings per Share -- Chapter 2 The Cash Flow Statement -- Cash from Operating Activities -- Revenue -- Cost of Goods Sold -- Operating Expenses -- Depreciation -- Interest -- Taxes -- Cash from Investing Activities -- Cash from Financing Activities -- Financial Statement Flows Example -- Walmart's Cash Flow Statement -- Cash from Operating Activities -- Cash from Investing Activities -- Cash from Financing Activities -- Cash Flow Statement-Making Projections -- Cash from Operating Activities -- The Seven Methods of Projections -- Cash from Investing Activities -- Proceeds from Disposal of Property and Equipment.

Items Based on Cash Available -- Cash Flow from Financing Activities -- Dividends -- Purchase of Common Stock -- Purchase of Redeemable Non-Controlling Interest -- Payment of Capital Lease Obligations -- Other Financing Activities -- Effect of Exchange Rate on Cash -- Chapter 3 Depreciation Schedule -- Straight Line Depreciation -- Accelerated Depreciation -- Declining Balance -- Sum of the Year's Digits -- Modified Accelerated Cost Recovery System (MACRS) -- Deferred Taxes -- Deferred Tax Asset -- NOL Carryback Example -- Deferred Tax Liability -- Projecting Depreciation -- Straight Line Depreciation -- Anchoring Formula References -- Accelerated Depreciation -- Chapter 4 Working Capital -- Operating Working Capital -- Walmart's Operating Working Capital -- Receivables -- Inventory -- Prepaid Expenses -- Accounts Payable -- Accrued Liabilities -- Accrued Income Taxes -- Projecting Operating Working Capital -- Receivables -- Inventories -- Prepaid Expenses -- Accounts Payable -- Accrued Liabilities -- Accrued Income Taxes -- Operating Working Capital and the Cash Flow Statement -- Changes in Accounts Receivable -- Inventories -- Prepaid Expenses -- Changes in Accounts Payable -- Changes in Accrued Liabilities -- Changes in Accrued Income Taxes -- Chapter 5 The Balance Sheet -- Assets -- Current Assets -- Cash and Cash Equivalents -- Accounts Receivable -- Inventory -- Prepaid Expense -- Non-Current Assets -- Property, Plant, and Equipment (PP&E) -- Intangible Assets -- Liabilities -- Current Liabilities -- Accounts Payable -- Accrued Liabilities -- Short-Term Debts -- Non-Current Liabilities -- Long-Term Debts -- Deferred Taxes -- Walmart's Balance Sheet -- Current Assets -- Non-Current Assets -- Goodwill -- Other Assets and Deferred Charges -- Current Liabilities -- Non-Current Liabilities -- Deferred Taxes -- Redeemable Non-Controlling Interest.

Shareholders' Equity -- Balance Sheet Projections -- Cash Flow Statement Drives Balance Sheet vs. Balance Sheet Drives Cash Flow Statement -- Assets -- Accounts Receivable -- Inventory -- Liabilities -- Accounts Payable -- Balancing an Unbalanced Balance Sheet -- NYSF Balance Sheet Balancing Method -- Chapter 6 The Debt Schedule, Circular References, and Finalizing the Model -- Debt Schedule Structure -- Modeling the Debt Schedule -- Short-Term Debt -- Mandatory Issuances/(Retirements) and Non-Mandatory Issuances/(Retirements) -- Long-Term Debt Due within One Year -- Obligations Under Capital Leases Due Within One Year -- Long-Term Debt -- Long-Term Obligations under Capital Leases -- Total Issuances/(Retirements) -- Total Interest Expense -- Cash Available to Pay Down Debt -- Circular References -- Circular Reference #Value! Errors -- Automatic Debt Paydowns -- Basic Switches -- Finalizing the Model -- Part TWO Valuation -- Chapter 7 What Is Value? -- Book Value -- Market Value -- Enterprise Value -- Multiples -- Three Core Methods of Valuation -- Comparable Company Analysis -- Precedent Transactions Analysis -- Purchase Multiples -- Discounted Cash Flow Analysis -- Chapter 8 Discounted Cash Flow Analysis -- Mid-Year vs. End-of-Year Convention -- Unlevered Free Cash Flow -- Weighted Average Cost of Capital (WACC) -- Cost of Debt -- Cost of Equity -- Market Risk Premium -- Beta -- Levering and Unlevering Beta -- Terminal Value -- Multiple Method -- Perpetuity Method -- Walmart DCF Analysis -- WACC -- Cost of Equity -- EBITDA Method -- Perpetuity Method -- Chapter 9 Comparable Company Analysis -- Last Twelve Months (LTM) -- Calendarization -- Costco as a Comparable Company -- Costco Adjusted 2012 Year End -- Costco Adjusted LTM Data -- Costco Annual Income Statement -- Revenue -- COGS and Operating Expenses -- Depreciation -- Interest -- Taxes.

Non-Controlling Interests -- Non-Recurring Events -- Earnings per Share (EPS) -- Costco Quarterly Income Statement -- Backing into Q4 -- Costco Year-End and LTM Adjustments -- Costco Projections -- Revenue -- COGS -- Depreciation -- Other Income -- Taxes -- Non-Controlling Interests -- Shares and Earnings per Share -- Calculating Comparable Metrics -- Diluted Shares Outstanding and the Treasury Stock Method -- Costco Market Value and Enterprise Value -- Multiples -- Chapter 10 Precedent Transactions Analysis -- Identifying Precedent Transactions -- Walmart Precedent Transaction Analysis -- Chapter 11 Conclusion -- 52-Week High/Low -- Comparable Company Analysis -- Precedent Transactions -- Discounted Cash Flow -- Apendix 1 Model Quick Steps -- Apendix 2 Financial Statement Flows -- Apendix 3 Excel Hotkeys -- About the Author -- About the Companion Web Site -- Index.