noob with easy "year over year" question
hi team -
when someone says Q4 2020 was 10% better year over year, are they saying that Q4 of 2020 was specifically 10% better than Q4 of 2019?
and when someone says year over year we were up 10% 2020, are they saying 10% growth vs. 2019 (in annual terms)?
thank you so much
Yes. If it was prior quarter or Q4 Vs Q3 they'd specify it
Hey man.... circling back here.
is the following line item the same thing as "cash burn"?
"Net increase (decrease) in cash and cash equivalents: =($100)"
So for example, for company A, could you tell your MD that cash burn in 2020 was -$100?
What if there was a net increase of $100. You would say the company had NO cash burn?
Thanks a bunch in advance as always.
I would think of cash burn as unlevered or levered free cash flow (CFO+CFI). You could have a cash burning company, but be raising debt or equity to have the cash to continue operations.
If you wanted to get really technical, a TRUE cash-burning company would be burning cash on purely CFO+maintenance capex (taking out growth capex when calculating CFI).
Also, in my examples, we're assuming that CFO and CFI can be negative.
agreed. when we calculate liquidity runway we look at CFO, maintenance capex (or just assume haircut on cash capex if not split) and cash interest (if no waivers). they could have drawn RCF / raised debt which would make financing flows blow up and give you positive cash but afterwards they'd be burning again
disclaimer - this is POV when we try work out if company is good target for liquidity support. we don't value stuff PE wise.
ps OP please don't use "circle back". you're not the white house press secretary
Beatae saepe unde ut perferendis exercitationem tempora animi. Provident autem alias molestias dicta. Est facilis accusamus facilis quia sit a. Veniam sed aut dolor. Quos eum magni ut quisquam et. Minus in quis in consequatur.
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...