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bean

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  1. Great paper, West. Thanks. One additional data source is http://www.kaijinet.com/jpexpress/. This site has English translations of the financials for all Japanese companies that file their statements in XBRL format. Also, the site is scrapable. MSN Money, Financial Times etc probably pull from the raw XBRL data in some form or other. However, these sites simplify the financial statements by aggregating (and dropping) accounts. For example, check out the non-current asset accounts for Isamu on MSN Money — they don’t even add up! In comparison, the kaijinet site breaks down the accounts, which can help you arrive at better estimates of excess cash etc. Good luck with your job search.
  2. Thanks for the pointers everyone. These all look like useful rules-of-thumb. For a general screen (before digging into the details of each company and industry), do you think using the CCC is a good estimate for your more detailed approach?
  3. After buying a stable, no-growth business for its market cap and paying off its short and long-term debt, how much excess cash can be extracted from its balance sheet? Here are three estimates: A) All cash and securities. This is the from the simplified definition of EV. B) All cash and securities, as long as the current ratio is at least 2. This is more realistic, since the business needs cash to rebuild inventory, pay employees etc. C) All cash and securities after leaving a buffer to cover the costs of one cash conversion cycle (CCC), e.g. CCC * (COGS+SG&A)/365. EV/EBIT and ROIC values can vary greatly depending on whether A, B or C is used. What are some other approaches to estimating excess cash?
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