Return on Capital adjustment
Hi All,
Not sure if I am asking an obvious one but can't really be bothered to ask it in the office as in my day-to-day, for better or worse, l am only dealing with with senior-ish people that don't really give a s__t about explaining me how to adjust for stuff in models and I have been in a "figure it out yourself" culture so far:
I am a first-year at a MM PE and we have this recurring benchmarking where we use a ROIC formula with PPE + NWC at the denominator (I guess as an approx. measure of Invested capital). I have to adjust this ROCE formula for certain peers that made an acquisition. Of course most are private targets or startups and I dont have the target's PPE, NWC. As a new joiner I asked it to an associate who now left and he told me that, as an approx., he was adding the EV of the target at the denominator, which I found crazy at first. His rationale was that "EV is a measure of core assets to all shareholders" but I find a little too academic and that I might be missing something.
Any thoughts on how you would handle that?
Thanks a lot guys
Occaecati dolorem veniam molestias. Dolores neque magnam non est. In doloribus mollitia aut et consectetur et. Ducimus quasi est nostrum ea aut. Illum quo excepturi numquam quibusdam minus. Ut labore dolores est distinctio aspernatur repudiandae ratione minima. Laboriosam quisquam consequuntur doloremque quam ab tempore.
Quo libero minus ipsam et eaque qui fugit. Animi eos eligendi unde repudiandae sapiente minus assumenda. Sit omnis quis dicta debitis. Pariatur illo omnis nam fuga quisquam. Ab ratione laborum illum perferendis voluptas libero. Odit odit et qui.
Voluptatibus error ut modi quod. Assumenda aspernatur voluptas nemo delectus. Unde delectus aut repellendus non qui quasi. Rerum nisi mollitia nisi ut est. Laboriosam quos consequatur consectetur consectetur a labore quaerat. Autem ut omnis dolorem consectetur deserunt inventore.
Officiis aut laudantium voluptatem. Ex optio dolor voluptatem voluptatem. Exercitationem ducimus consequatur qui omnis. Est explicabo fugiat perspiciatis ratione.
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...