What is Deferred Revenue? – The Ultimate Guide (2022)

What is Deferred Revenue? – The Ultimate Guide (2022)

Master the concept of Deferred Revenue so you can use it on the job in Investment Banking, Private Equity, and Hedge Funds or Mutual Funds. In this article, we will cover: TL;DR Why Does Deferred Revenue Matter? Deferred Revenue (also called Unearned Revenue) is a critical concept to master if you are aiming for (or currently working in) Finance….

Accretion / Dilution – The Ultimate Guide (2022)
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Accretion / Dilution – The Ultimate Guide (2022)

Master Accretion / Dilution so you can ace your Investment Banking, Private Equity, and Investment Management interviews. We’ll break everything down with a simple 3-Step Framework as well as tips on how to avoid common pitfalls. Let’s jump in! In this article, you will learn: Accretion / Dilution: what it is, why it matters, and…

EBITDA – Definition, Application, and Pitfalls in Under 10 Minutes (2022)

EBITDA – Definition, Application, and Pitfalls in Under 10 Minutes (2022)

EBITDA is a commonly used profit metric that represents a ‘proxy for Cash Flow.’ However, analysts must be careful when analyzing EBITDA because it excludes the impact of Depreciation & Amortization, Interest, Taxes, Capital Expenditures, and the impact of Changes in Net Working Capital. In this article, you will learn the definition, common uses, and pitfalls…

Negative Working Capital Made Easy – The Ultimate Guide (2021)

Negative Working Capital Made Easy – The Ultimate Guide (2021)

Master the concept of Negative Working Capital so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you will learn: Why Negative Working Capital matters. How Negative Working Capital creates excess Cash Flow (essentially a ‘Free Loan’) for a Business. The two primary drivers of Negative…

Calendarization in 2 Steps – The Ultimate Guide (2021)

Calendarization in 2 Steps – The Ultimate Guide (2021)

Master the Calendarization concept so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you will learn: Why Calendarization matters. How to Calendarize Financial data. Real-life example: Calendarization for Forward EV/EBITDA Multiples. TL;DR Calendarization allows us to compare Financial data for Companies with different Fiscal Year…

What is a Revenue Run Rate? – The Ultimate Guide (2021)

What is a Revenue Run Rate? – The Ultimate Guide (2021)

Master the Revenue Run Rate concept so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you will learn: Why the Revenue Run Rate matters. How to Calculate Revenue Run Rate. The pitfalls of Revenue Run Rate calculations. Other Run Rate Applications (SAAS ARR and EBITDA)….

What is the Depreciation Tax Shield? – Ultimate Guide (2021)

What is the Depreciation Tax Shield? – Ultimate Guide (2021)

Master the Depreciation Tax Shield concept so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you will learn: Why the Depreciation Tax Shield matters. How to Calculate the Depreciation Tax Shield. The Cash Flow and Valuation Impacts of the Depreciation Tax Shield. TL;DR Any expense…

LTM Revenue (and EBITDA) in 3 Steps – The Ultimate Guide (2021)

LTM Revenue (and EBITDA) in 3 Steps – The Ultimate Guide (2021)

Learn to calculate LTM Revenue and EBITDA (or TTM Revenue and TTM EBITDA) like a pro so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you’ll see: TL;DR Last Twelve Month (‘LTM’) calculations help us see the most recent year of Financial performance and can…

Treasury Stock Method in 3 Steps – The Complete Guide (2021)

Treasury Stock Method in 3 Steps – The Complete Guide (2021)

Learn to use the Treasury Stock Method like a pro so you can use it on the job in Investment Banking, Private Equity, and Investment Management. In this article, you’ll see: Why professionals use the Treasury Stock Method. The 3-Step Process for the Treasury Stock Method. The difference between a Company’s Basic Share Count vs….

Enterprise Value vs Equity Value – Ultimate Guide (2021)

Enterprise Value vs Equity Value – Ultimate Guide (2021)

Introduction: Enterprise Value and Equity Value — Two Confusing Concepts Let’s talk about two of the most commonly misunderstood terms in finance: Enterprise Value and Equity Value. There are numerous trick interview questions (see below) asked around these concepts because the mechanics behind them can be very confusing. Here’s a sample question: Relevant Interview Question:…