Thank you for your compliments. Actually, I count Sales and Marketing as an investment, as well as R&D. I calculate the taxes and capital expliclty, then apply it to EBITDA (earnings before interest taxes, depreciation, and amortization), EBIT (earnings before taxes), EVA (economic value added), NOPAT (net operating profits after taxes) and/or perpetual growth models, under 9 different discounting rate (to relfect interest rate fluctuations) and growth scenarios - with a sensitivity analysis incuded for each one. Explicit formulas used are propietary information, but I will walk every throught the basic logic behind the calculations as we go on.
What the "enterprise" version of my software does is separate the different accouting functions. When I get to the cash flow portion of the model, you will see where I add back capital expendintures and investments such as sales and the effects of amoritization over a corporate project specific period. The income sheet simply shows you the accrual accounting breakdown of revenue and expenses. The model has about 16 sections in it (totalling over 1,200 lines of code and formalae) inculding AMT tax, investment banking expenses, EVA, MVA calucations and a comaprehensive IRR on capital broken down to IRR on debt, equity, preferred equity, and total capital. Also included are debt and preferred dividend paydown schedules, etc. This is all done in real time using constantly updated market information pulled from the web either automtically or at the touch of a button.
The obvious reason for creating two distinct products is to serve to distinct markets. It is obvious that the average individual investor will not have the time &/or expertise to do this style of analysis, which is why I made a smaller, "ready to run" package which is quite capable in itself. The "enterprise" versionis forhte medium to large company who wishes to guage the feasiblity of acquiring, or disabling another company (A VERY POWERFUL TOOL).
In the future please define all of your monikers and symbols so the lesser experienced on this thread can share in your insight. I will be posting the cash flow analysis sometime today.
Your input is greatly appreciated.
For those of you that are confused by this rahter archaic banter, I will simplify by example in my next post. |
