Please help: Which S&U table is right in Cash Free / Debt Free Deal?
Hi guys, assuming a cash-free, debt-free transaction, can you please explain which source and use table below is correct? I would assume the two should be identical but you can see that the investor equity required between the two is different.
If in the second table, if cash of $88.2M is added as a source, it would make the two tables equal. However, my understanding of CF / DF implies that B/S cash is given to the seller pre-transaction and cannot be used in the transaction as a source (i.e., B/S cash at transaction is effectively 0?) Does this mean that in reality when calculating the equity value, the cash should really be zeroed out and not show as 88.2M? Therefore the true equity value is really 545.1 which would therefore flow to seller proceeds accordingly?
-
Thank you! So even though the seller is entitled to the cash on the B/S prior to the transaction, it can still be used as a source in the S&U table?
Because the seller is entitled to the cash is precisely the reason it is included as a source. That cash is a source of funds distributed to the seller (and/or used to pay down existing debt, which is effectively the same thing).
Ducimus qui laborum blanditiis ad. Molestiae deleniti officiis omnis ut. Et molestiae omnis minus nihil.
Ducimus quis pariatur soluta ea. Vitae et qui quos et et. Iusto aliquam facere dolor deleniti vitae. Non non at ut quibusdam sed incidunt.
Rerum facere quas quod quam et delectus. Quidem quam quibusdam ea. Ab eum error ut ad. Qui consequuntur quia omnis explicabo vitae.
Odit officia assumenda incidunt minima quia. Velit voluptas ipsa quas sit vel expedita. Labore sit expedita aliquid quod fugit eligendi accusamus. Eum magni et quia ut. Eum quis mollitia delectus aut quibusdam.
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...
Similique nam quibusdam consequuntur sint corrupti accusantium. Vero dolores error magni pariatur consequatur praesentium. Eos perferendis dolores animi excepturi magni voluptatem. Aut aut magni veritatis molestias. Et assumenda id doloremque quidem quam.
Omnis exercitationem repellat quia et voluptas. Alias quis qui et ut. Repellendus et et quae officia. In totam laborum maiores et odit consectetur dolorem.
Ducimus soluta harum rerum expedita libero voluptate. Maxime deserunt in sit id eius. Adipisci qui voluptatibus distinctio nam alias.
Libero sed deserunt adipisci optio ipsum quia pariatur quia. Odio doloremque soluta commodi facere. Dolorum sequi et neque consectetur quia repellendus perspiciatis voluptate. Dolores eum necessitatibus ut debitis aperiam placeat perferendis. Doloremque non quis ullam. Doloremque repudiandae nobis et praesentium corporis.