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Unformatted text preview: If deferred taxes is negative in your Cash Flow Statement, then you would add it back instead of subtract it out. Add Stock based compensation from Cash Flow from Operations. Please note that this is a non-cash transaction, similar to depreciation, which is added back to give you your NCAV value. Your model should look like: 2006 2007 2008 2009 2010 11Q1 11Q2 11Q3 EBIT (operating income) + D & A- Capital Expenditures- Cash Taxes + Stock based compensation Change in Net Current Asset Value Note that you do not have to forecast any earnings or do anything like that. We only want to see what you are doing as to the historical NCAV This is your percentages or haircut of NCA less Total Liabilities times what you think you could receive in your specific scenarios CAV This is your Current Asset Value without the percentages or haircut Graham NCAV This is your Net Current Assets less Total Liabilities times Grahams recommended 66% to follow his framework...
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- Winter '12