After 10 years in Finance, I’ve learned that accounting is the tool that poor performing companies use to make themselves look good. It’s completely arbitrary. The only reason to learn accounting is to find out what a company is hiding. There’s such a huge difference between financials and cash flow based on bank accounts, that financial reporting by accrual accounting is virtually useless.

Files & Resources: breakingintowallstreet.com/kb/accounting/income-statement/ Table of Contents: 0:00 Introduction 0:39 The Short Version 5:43 Part 1: More Advanced Line Items 7:24 Part 2: Why Does Item X Appear on the IS? 9:50 Part 3: Income Statement Forecasting 11:46 Part 4: The Income Statement in Interviews 14:10 Recap and Summary

Hey Brian, hope you are doing well. I have a question for you regarding the specific multiple that should be used for valuing a private company in an LBO scenario. If you're tasked with finding the entry multiple to pay for LTM EBITDA for a private company and you're given an output of comps (trading or precedents), should you always use the median multiple?

What is the difference between book value and market value in Equity Value?

Can you please send me the solved excel file

why do we NEED to accelerate the amortization of OID, and if it benefits the bottom line can you just do the whole thing? thank you in advance\

Can you explain when the concept of EO comes into play in bargain purchase? I recently came across a bargain purchase transaction in my firm where a hospital was acquired at less than its book and fair value of assets. My manager’s view was that this is a case of EO, so we had the fixed assets (FA) of the target revalued at their post EO values which basically meant that the capital asset team revalued the FA to such a number where the total of FA + NWC reconciled with the purchase price paid (BEV) for the target. In short, we recorded zero goodwill and no intangibles while reducing the FA numbers. But I’m confused whether this method is correct or not and how the acquirer would actually record this in its books because we didn’t show any gain on bargain purchase in our valuation report. Thanks!

Thank you the video. You mention that SaaS cos often have positive change in NWC. But is not also the case that they have a negative WC dynamic (low inventory, high deferred revenue etc.).? As revenue grows would you not expect the change in NWC to also be negative?

What happens if dividend income received is already greater than the investment account. How to account for the excess?

I got this question recently never intuitively understood the answer. LBO companies look for targets with large excess cash balances because it lowers the cost of acquisition. I get acquiring it grants you access to the cash but it seems like a wash at best and more expensive at worst. For example an extra $10M of cash on balance sheet you would need to finance through equity or debt. All equity would be a wash dollar for dollar and all debt would be more expensive than the cash cause of interest. How do you make heads or tails of this?

Question on interest expense if it increases by $10 is there a difference if it’s paid in cash? how does it flow? Like this?: income statement down 10, cash flow statement net income down 10 and then cash flow overall down by $10, balance sheet: cash and retained earnings both down by 10. I guess round about way of asking is there an additional impact of $10 on cash from financing activity if it’s paid in cash on top of the $10 hit to net income?

V useful

Awesome ❤

Why are we getting avarage in 2 years and after calculating only 1?

Files & Resources: breakingintowallstreet.com/kb/project-finance/debt-sculpting-vs-debt-sizing/ Table of Contents: 0:00 Introduction 1:09 Part 1: The TL;DW of Debt Sculpting and Sizing 3:07 Part 2: Simple Debt Sculpting Example 4:49 Part 3: DSCR-Based Debt Sizing 7:10 Part 4: LLCR-Based Debt Sizing 9:25 Part 5: VBA to Automate Debt Sizing and Avoid Circ Ref’s 17:24 Recap and Summary

Why is understanding the total debt and market cap crucial in EBITDA?

Thanks for the content! Super helpful. When you say discount rate, are you referring to the average discount from list? Or cost of capital?

1) If the earn out if pegged for year 5 do you adjust the income statement and the corresponding entry cash flow from ops section every year 2) if it’s paid out in year 5 you see a cash flow from financing impact but will there be a cash flow from operations impact that year as well?

Hello hello, thank you very much for your video. You provide crazy value! I bought your courses and they are super great 👍🏼 Any chance you could prepare a deep and detailed valuation of Qurate Retail (QRTEA). I think it would provide tremendous value for the community!!

how do you calculate the purchase price per share of either alfheim capital or asgard capital using both a conversion discount rate and a valuation cap? For example, if we look at Asgard Capital, would it be the valuation cap (10,000,000) divided by the total shares in the post-seed round table (1,333,333) multiplied by a given conversion rate (for example, 20%)? It would look like (10,000,000/1,333,333)*0.8 Does this work or did i get it completely wrong?

great video. is most of this informatoin still up to date (I am europe based) ?

goat shit

Hideous! I thought they were going to color code the columns and cells Color coding the numbers only looks tacky 😩

This one video beats WSP's ENTIRE course. Definitely going to purchase the whole thing from you guys. Great video.

useful video

thanks for your detailed explanation of the M&A

Great content. Really well done. Balances accuracy, speed and function.

How can the ROU asset and liability not balance? What am I missing here?

The revenue growth rate was in line with what I seen in SaaS firms pre-revenue to pre-IPO covering the venture debt space. Pretty spot on about how SaaS metrics are used to analysis firms. Generally speaking, we use many of those things mentioned to figure out whether something is right, if not, we use it to figure where to start looking at.

Great Video. Thanks Brian!

Thanks Bryan. Love it when you post.

great content

Why don't we integrate the 2% ($24m) advisory & management fees? I assumed that I should at least subtract that figure our return calculation (from the Equity Value). Thank you very much!

Why is the CapEx (factory maintenance expense) based on last year's number of factories and not the number of factories we have this year? Thank you very much

Files & Resources: breakingintowallstreet.com/kb/venture-capital/rule-of-40/ Table of Contents: 0:00 Introduction 1:14 The Rule of 40 in a Nutshell 3:58 Part 1: How to Calculate the Rule of 40 7:27 Part 2: Valuation Implications 9:09 Part 3: The Rule of 40 as an Operational Metric 10:25 Part 4: The Rule of X and Other Variations/Improvements 11:42 Recap and Summary

sorry i´m confused. in your webpage you mention that a you can also create a Net DTA (DTL-DTA). Does that play when calculating Enterprise Value (subtracting or adding)? also, inside DTA you find NOL, in order not to double count, should I consider Net DTA without NOL, and treat NOL at the end considering it a non-operating asset? thanks

Sir, Do banks have working capital? How does the concept of Working Capital apply to a bank? Is the Liquidity Coverage Ratio (LCR) the same as Current Ratio/Working Capital Ratio? It is difficult to calculate the working capital of a bank because a bank's balance sheet does not include typical current assets and liabilities.

Can it used in a nonprofit semi government medical organization?

Great teaching and video Brian

Hey Brian thanks for the video. I checked for the file and didn’t see it on the site. Kindly can you provide and updated link?

Bro, thank you for the good stuff. cheers!

where can I find this Excel?

Thanks for your video! When calculating the tax-deductible interest expense on the P&L, you included the entire interest expense (included the interest you didn't pay, like the PIK), not just the coupons you paid out to debt holders. Is this correct? Is the entire interest expense tax deductible?

Thank you.

Can someone please clear this doubt: when Accounts Receivable increases, why won't the cost of goods sold increase? Accounts Receivable increased due to "extra" sell of a product. So, shouldn't have the costs of goods sold also increased? I cant seem to understand why COGS wont increase!?

Thank you! Most of the banking videos are usually super long or not detailed enough, so this 15 min vid strikes a great balance!

Do investors usually prefer to see a negative or positive change in NWC?

This was great, could you make more complex videos of solving and explaining interview type questions - thanks!

Awesome, please share a detailed video on the cash flow statement as well. Thanks

If equity proceeds are 1484 why does that not tie to the total return to equity investors? It seems like there’s more money unaccounted for