Step Iii Spread Key Statistics Ratios And Trading Multiples

Once the necessary financial information for each of the comparables has been located, it is entered into an input page (see Exhibit 1.5).27 This sample input page

27For modeling/data entry purposes, manual inputs are typically formatted in blue font, while formula cells (calculations) are in black font (electronic versions of our models are available on our website, www.wiley.com/go/investmentbanking). In this book, we use darker shading to denote manual input cells.

EXHIBIT 1.5 Sample Comparable Company Input Page

Company A (NYSE:AAA)

Input Page in millions except per share data)

Company Name

Company A

Ticker

AAA

Stock Exchange

NYSE

Fiscal Year Ending

Dec-31

Moody's Corporate Rating

NA

S&P Corporate Rating

NA

Predicted Beta

1.00

Marginal Tax Rate

% of 52-week High 52-week High Price 52-week Low Price Dividend Per Share (MRQ)

Fully Diluted Shares Outstanding Equity Value

Plus: Total Debt Plus: Preferred Stock Plus: Noncontrolling Interest Less: Gash and Cash Equivalents Enterprise Value

1/0/1900 1/0/1900

EV/Sales

Metric EV/EBITDA

Metric EV/EBIT Metric P/E

Return on Invested Capital Return on Equity Return on Assets

Implied Annual Dividend Per Share

Hennin

Debt/Total Capitalization Total Debt/EBITDA Net Debt/EBITDA EBITDA/lnterest Expense

Reported Income Statement

COGS

Gross Profit SG&A

Other Expense / (Income)

EBIT Interest Expense Pre-tax Income Income Taxes Noncontrolling Interest Preferred Dividends Net Income Effective Tax Rate

Weighted Avg. Diluted Shares Diluted EPS

Adjusted Income Statement

Reported Gross Profit Non-recurring Items in COGS Adj. Gross Profit

% margin

Reported EBIT Non-recurring Items in COGS Other Non-recurring Items Adjusted EBIT

% margin

Depreciation & Amortization Adjusted EBITDA

% margin

Reported Net Income Non-recurring Items in COGS Other Non-recurring Items Non-operating Non-rec. Items Tax Adjustment Adjusted Net Income % margin

Adjusted Diluted EPS

Fiscal Year Ending December 31

Prior Stub 9/30/2007

Current Stub 9/30/2008

9/30/2008

NA NA

NA NA

NA NA

NA NA

NA NA

NA NA

Debt/Total Capitalization Total Debt/EBITDA Net Debt/EBITDA EBITDA/lnterest Expense

(EBITDA-capex)/lnterest Expense EBIT/lnterest Expense

Depreciation & Amortization

% sales

NA

NA

NA

NA

NA :

NA

Sales EBITDA

EPS

% sales

NA

NA

NA

NA

NA i

1-year

2-year CAGR Estimated

1-year

2-year CAGR Long-term

Cash and Cash Equivalents Accounts Receivable Inventories

Prepaids and Other Current Assets Total Current Assets

Property, Plant and Equipment, net Goodwill and Intangible Assets Other Assets Total Assets

Accounts Payable Accrued Liabilities Other Current Liabilities Total Current Liabilities

Total Debt

Other Long-Term Liabilities Total Liabilities

Noncontrolling Interest Preferred Stock Shareholders' Equity Total Liabilities and Equity

Balance Check

Calculation of Fully Diluted Shares Outstandin'

Basic Shares Outstanding

Plus: Shares from In-the-Money Options

Less: Shares Repurchased

Net New Shares from Options Plus: Shares from Convertible Securities Fully Diluted Shares Outstanding

Options/Warrants

Number of Shares

Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5 Total

Convertible Securities

Issue 1 Issue 2 Issue 3 Issue 4 Issue 5 Total

is designed to assist the banker in calculating the key financial statistics, ratios, and multiples for the comparables universe.28 The input page data, in turn, feeds into output sheets that are used to benchmark the comparables (see Exhibits 1.53, 1.54, and 1.55).

In the pages that follow, we discuss the financial data displayed on the sample input sheet, as well as the calculations behind them. We also describe the mechanics for calculating LTM financial statistics, calendarizing company financials, and adjusting for non-recurring items and recent events.

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