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Liquidity Ratios and Asset Based Lending

Illiquidity and Insolvency for Debtors Any entity that has debt can become illiquid or insolvent. Illiquid means that the debtor cannot service the debt at the time with liquid assets (which in accounting class generally means cash, accounts receivable and inventory - in decreasing order of liquidity), not because it does

Cloud Computing Primer

Cloud Computing Overview Cloud computing is the provision of internet services through the internet (the “cloud”). This includes databases, storage, software, and servers. Most businesses that use computers will eventually move to the cloud due to the advantages from a cost and flexibility perspective. As an example, instead of a server with a

Economic Calendar

Major Economic Data Releases Economists and analysts at major sell side and buy side institutions will prognosticate on where these numbers end up. Theoretically, current asset prices reflect these expectations. If numbers are better than expected, this will be a positive for affected assets and vice versa. Country specific data will lead

APV Method: Adjusted Present Value Analysis

The standard Discounted Cash Flow (DCF) method is the typical tool used to value firms, but one drawback its inability to handle changing debt to equity levels. As we know, higher debt offers a higher tax shield, which in turn increases both firm value and equity value. To explicitly account

Introduction to Hostile Takeovers and Unsolicited Bids

What is a Hostile Bid? Hostile takeovers happen when an acquiring entity looks to purchase a public company without the blessing of the Board of Directors or executive management. The would-be acquirer instead makes an offer for shareholders to tender their shares to them or starts a proxy fight to boot

Introduction to Capital Structure

Firms can choose to finance themselves with a number of securities: shares, bonds, preferred shares, convertible bonds, etc. These securities can be classified into two broad categories, debt and equity, and each comes with its own cost. Capital structure describes the way a firm finances itself. Data from Statistics Canada, 2009 Capital

Incurrence Covenants for High Yield Bonds

Senior Debt Covenants (Maintenance and Financial Covenants) and Protections A covenant is a vow - positive covenants or covenants of a positive nature (do not commit fraud, file your financial statements no later than 60 days after the end of a fiscal quarter) commit an obligor to do something. Negative covenants

Stock Pitch: Long Canada Goose (TSE:GOOS)

This stock pitch is intended to be a resource for interview preparation, it should not be interpreted as investment advice. I recommend a long position on Canada Goose. Currently trading at $74.56, I believe it is undervalued as investors overreacted on Huawei news and the subsequent breakdown of Canada China relations.