Hi All, I was preparing a model of a company which has business spin-off in 2011 and sold their two business and now running one business only. I was wondering how to prepare financial model for this company. 1. How to take historical data for Income statement. Do I take historical figure for only one business segment (the new company) or consolidated Income statement. The company has given revenue figure for every business segment but not other items. 2. In case I use historical figure for only one business; how to calculate historical figure for other items (depreciation,interest, taxes etc.). 3. What about balace sheet for historical years. Do I use consolidated balance sheet or only for new business segment. The company didnt give balance sheet for every segment, so how to divide total assets/liabilities between business segment. 4. What about Cash flow statement for historical years? Please reply me soon. Thanks in advance.
I would use the segment information from the footnotes for the remaining business. It should give you assets, revenue, operating income, depreciation and capex. You will need to make some assumptions on the historical balance sheets but that should not be too difficult since you now have a clean balance sheet for the remaining company.
@chad Thanks for your response. Company has given remaining business Income statement for last 5 years in current year Annual repirt. So I think that will solve my purpose for Income statement. About balance sheet, they didnt disclose in their annual report assets/liabilities for segment wise. So in case how would assets/liabilities belong to remaining business for historical years. Please explain this.
Meanwhile I must tell you company name is Beam Inc which is leading Spirit maker in US and sold their other business in 2011. They have given amount for discontinued operation for 2010 in current year 2011 annual report. So probably that will help to even create 2010 balance. But what about 2008/2009 balnce sheet.
This thread is about something completely different than I was expecting.
The best way to prepare a model in case of a split up goes like this:
a) show model wad of cash
b) get her coked up
c) borrow your buddies sports car.
d) take lots of pictures and put them on facebook to make your ex jealous
+1
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