What are the differences in terms of accounting between a normal company and a SaaS company? How do those differences impact an accounting question like this?
| +301 | I Snuck Into UBS Office And Took A Shit On The Floor | 28 | 18h |
| +291 | TPH V.S. Mizuho [HOU] | 36 | 1d |
| +244 | Why leave restructuring for M&A? | 30 | 18h |
| +241 | Houston 2026 Oil & Gas Investment Banking Rankings | 57 | 13m |
| +230 | Best Power/Renewables/Energy Teams? | 39 | 7m |
| +187 | Centerview HC group falling off? | 30 | 17h |
| +185 | Predicted 1Q 2027 Story - UBS IB blames Outlook Outage for Down Quarter | 36 | 4h |
| +183 | Actual EB List | 27 | 1d |
| +178 | How does getting staffed on an "account" work? | 40 | 9h |
| +176 | Incoming TPH Analysts Larping as PWP on LinkedIn | 25 | 4h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Big question, so I'll call out two considerations:
One of the big things to think about with SaaS companies is how working capital differs from non-SaaS companies. The subscription model means significant deferred revenues, which in turn results in (often times) deeply negative working capital. That's one thing to think about.
Another thing to think about is that a lot of tech companies that are / were once start ups will have lots of stock based compensation. Whether or not you should add that back into FCF is up for debate - thinking through why is a good exercise / will definitely come up in interviews if that's why you're asking this question.
Thanks for the response! My friend in an interview was asked directly to walk through a SaaS company’s financial statements from revenue to unlevered FCF - so I was wondering if the correct answer wasn’t simply backing into EBIT by subtracting COGS and operating expenses, then doing the standard calculation for Unlevered FCF
Voluptas non repudiandae sequi voluptatem. Molestiae voluptatem similique incidunt voluptas hic. Sunt temporibus rerum laudantium velit voluptatem.
Saepe explicabo tempora omnis autem sunt. Qui suscipit beatae consequuntur cupiditate neque animi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...