✏️ 5 Examples from Lecture 5
This is the most challenging lecture we’ve had so far. Some of the concepts, like “Unlevered Net Income”, or how to calculate FCF given a complex scenario can be subtle, nuanced, and difficult.
The good news is that if you fully understand just one multi-part example from the lecture, you will have everything you need to not just feel confident about this material, but to understand it well enough to have earned that confidence. (You’ll still have to review and study it carefully, so you pseudo-memorize it, but it’s a great start.)
This Multi-part example shows up as Example 1, Example 4, and Example 6 from this week’s slides.
Contents of the following spreadsheet:
- “From L3” reviews crucial material from Lecture 3, related calculating operating cash flows and the sign convention you use for entering answers into a financial statement
- “Ex1 Slides,” “Ex4 Slides”, and “Ex6 Slides” comprehensively reproduces Examples 1, 4, and 6 from the slides. All three are related to the Cisco HomeNet example, and all three build on one another, forming a single combined example with all of the skills you need.
- “Ex1,” “Ex4,” and “Ex6” illustrate how to answer these question using Excel. They use a methodology that you can apply to the hardest capital budgeting quantitative problems that we will see. Caveat: they are designed as props for use within sections and may still be harder to use as independent study tools. Perhaps give them a try!
- The two pages with magnifying glasses, 🔎, explore important but nuanced points that may never be fully clear unless you take the time for a deep dive. They provide you with an explanation you can use for that deep dive.
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