- When projecting Equity in B/S using the CFS... Make sure that Net Income, Dividends and Stock Repurchases or Issuances flow into Equity
- Make sure you notice that the below line item is negative, so it must be negative otherwise it doesn't work
- When you linked Debt on BS to the various line items on CFS, you forgot to use Old Debt + CFS Line Items... you just had CFS line items. This is what you were supposed to do (see below). Make sure you always have that.
- Every line item on the BS and CFS needs to be linked to each other, whether that's using the CFS figures to get BS figures, or using BS figures to get CFS figures... they all need to be linked. E.g. your BS went out of balance consistently when your Change in Operating Liabilities didn't include "Other Long-Term Liabilities" but there was no other line item on the CFS that caught the "Other Long-Term Liabilities" part so it had to be linked anyway.
- When calculating Revolver, the "Cash Balance Before Additional Borrowing" uses last year's ending cash, but this year's CFO and CFI and the relevant parts of CFF + FX Effects Also.
- Remember that the Interest Expense on Debt should include the Amortization of Issuance Fees (which will increase the interest expense)
- When calculating IRR, you shouldn’t just use the simple IRR formula of “X^(1/n)-1”
- This only factors single year IRRs into account, but doesn’t take into account the impact of having cash flows throughout the year that will also need to flow into the IRR calculation
- So you need to IRR the cumulative cash flows received; these will include cash flows on items such as dividend recaps, anything else