Brian DeChesare

DECEMBER 21, 2022

And in fields like corporate finance , much of the recruiting happens at schools that are “semi-targets” for investment banking, such as ones in the #30 – #50 range in the U.S. But the problem is that revenue will also fall if advertisers flee, so even if the company’s margins improve, cash flow, EBITDA, etc.,

Banking 92

Banking Start-ups Finance EBITDA 92

Brian DeChesare

AUGUST 10, 2022

If Midstream companies want to grow beyond the fee increases written into their contracts and possible volume growth, they need to spend on Growth CapEx and estimate the incremental EBITDA from that spending: Further adding to the complexity is the GP (General Partner) / LP (Limited Partner) structure used at most MLPs.

Banking 94

Banking EBITDA Dividends Equity 94

Musings on Markets

JANUARY 6, 2023

By the same token, it is impossible to use a pricing metric (PE or EV to EBITDA), without a sense of the cross sectional distribution of that metric at the time. Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. EV/EBIT and EV/EBITDA 4. Cost of Capital 3.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

Brian DeChesare

MARCH 8, 2023

The fundamentals do not relate to EBITDA , Free Cash Flow , or valuation multiples but to factors like the weather, human behavior, geopolitics, and supply and demand. You think about these issues and commodity-specific factors, such as pipeline/plant capacity, outages, and new drilling activity for oil, to predict how prices might change.

Finance 115

Finance Start-ups Banking Alpha 115

Musings on Markets

JANUARY 31, 2024

In fact, that objective of value maximization drives every aspect of the business, as can be seen in this big picture perspective in corporate finance: For some companies, especially mature ones, value and profit maximization may converge, but for most, they will not.

Equity 79

Equity Book Value Start-ups Corporate Finance 79

Musings on Markets

JANUARY 5, 2024

In my corporate finance class, I describe all decisions that companies make as falling into one of three buckets – investing decisions, financing decision and dividend decisions. Financing Flows 5. EBIT & EBITDA multiple s 5. Dividend yield & payout 3. Default Spreads 3. Margins & ROC 3. Tax rates 4.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Musings on Markets

FEBRUARY 27, 2022

When profits are scaled to revenues, you get margins, and as with absolute earnings, margins come in various forms, as can be seen below: In addition to margins based upon income measures (gross, operating, after-tax operating and net), there are other margin variations, with EBITDA and after-tax operating margins coming into play.

Start-ups 80

Start-ups Equity Book Value Marketability 80

Musings on Markets

NOVEMBER 10, 2022

Accounting 101 I am not an accountant, and have no desire to be one, but I have used their output (accounting statements) as raw material in valuation and corporate finance. billion, which results in an adjusted PE ratio of about 6.

Finance 74

Finance Start-ups Equity Equity Financing 74

Musings on Markets

MARCH 8, 2023

This is the last of my data update posts for 2023, and in this one, I will focus on dividends and buybacks, perhaps the most most misunderstood and misplayed element of corporate finance. Of course, just as there are companies that choose other dysfunctional corporate finance choices.

Dividends 91

Dividends Start-ups Finance Corporate Finance 91

Brian DeChesare

SEPTEMBER 13, 2023

Its financial profile now looks like this: Its Debt / EBITDA is now 10x, its EBITDA / Interest has fallen below 1x, the Secured Debt is trading at 90% of its face value, and the Unsecured Debt is down to 60%. A few years later, the company’s industry declined, and it was slow to cut costs and enter new markets.

Equity 96

Equity Banking EBITDA Start-ups 96

Brian DeChesare

APRIL 13, 2022

That gets you thinking about materials companies that might benefit from this trend, so you research the sector and run a screen looking for companies with FCF yields >= 10%, revenue growth >= 10%, and TEV / EBITDA multiples <= 15x.

Equity 96

Equity Start-ups Banking Marketability 96

Brian DeChesare

JUNE 1, 2022

It is 100% possible to use standard valuation multiples, such as P / E and TEV / EBITDA , to value power/utility companies, and you’ll see many examples in the Fairness Opinions below. Books: Fisher Investments on Utilities , Principles of Utility Corporate Finance , and a metric ton of books on renewables.

Banking 98

Banking Equity Book Value Capital Structure 98