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  • Originally posted by Broncojohnny View Post
    All this math is just so tough to understand. I better get a job beating minorities and then covering it up.
    lol! Make sure you glue your whos who award to the dashboard of your cruiser.

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    • Originally posted by slow99 View Post
      Not speaking on the above mentioned fund anymore, just moving on to an example of how to think about it. Of course, it's just math, but I think a lot of people forget about how it flows through the model. Leaving nothing else changed, a miss in one period flows through and affects all other numbers.

      Take a series of numbers in Excel, start with 1,000 (in millions) year 0 and then grow it 10% per year for 5 years. This is a reasonable projection lots of people might use to value something. You'll have something that looks like this:

      0 1 2 3 4 5
      1000 1100 1210 1331 1464.1 1610.51


      Now, directly under it, copy the same series of numbers. Instead of returning 10% in the first year, return 7.8% year 1 and leave everything else unchanged.

      1000 1078 1185.8 1304.38 1434.82 1578.30

      Sum of first series of numbers = 6,716. Sum of second series = 6,581.
      The $22 million miss at t = 1 translates to a $134 million loss over the period.

      Now, if I'm valuing an asset at a multiple of sales (or whatever these numbers may be) ... let's say 6x this terminal value ... my value in the first case is $40,294 million. In the second case, it's $39,488 million. That $22 million loss in the first period negatively impacts my valuation by $806 million.
      http://www.truthcontest.com/entries/...iversal-truth/

      Comment


      • Originally posted by slow99 View Post
        Not speaking on the above mentioned fund anymore, just moving on to an example of how to think about it. Of course, it's just math, but I think a lot of people forget about how it flows through the model. Leaving nothing else changed, a miss in one period flows through and affects all other numbers.

        Take a series of numbers in Excel, start with 1,000 (in millions) year 0 and then grow it 10% per year for 5 years. This is a reasonable projection lots of people might use to value something. You'll have something that looks like this:

        0 1 2 3 4 5
        1000 1100 1210 1331 1464.1 1610.51


        Now, directly under it, copy the same series of numbers. Instead of returning 10% in the first year, return 7.8% year 1 and leave everything else unchanged.

        1000 1078 1185.8 1304.38 1434.82 1578.30

        Sum of first series of numbers = 6,716. Sum of second series = 6,581.
        The $22 million miss at t = 1 translates to a $134 million loss over the period.

        Now, if I'm valuing an asset at a multiple of sales (or whatever these numbers may be) ... let's say 6x this terminal value ... my value in the first case is $40,294 million. In the second case, it's $39,488 million. That $22 million loss in the first period negatively impacts my valuation by $806 million.

        Comment


        • ^ LMAO. Goodburger was one of the dumbest funny movies ever.

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