The on topic thread

[moomba]

If NFL have a London team they really need one up North too.

 

[jd2010]

surely you'd ask for into the billions?

british clubs should just continue to bring in more and more cash.

They probably would get £1b but surely nobody spends that much on a sports team

 

[jd2010]

If NFL have a London team they really need one up North too.

They hosted a game up there?

 

[Bojan KantKick]

100+ years of financial modelling and valuation techniques ignored in favour of a new model nobody is using.

elhadjihenry below is a simplified explanation on the effect of debt on valuations.
The Role of Debt and Cash
Why are debt and cash considered when valuing a firm? If the firm is sold to a new owner, the buyer has to pay the equity value (in acquisitions, price is typically set higher than the market price) and must also repay the firm's debts. Of course, the buyer gets to keep the cash available with the firm, which is why cash needs to be deducted from the firm's price as represented by market cap.

Think of two companies that have equal market caps. One has no debt on its balance sheet while the other one is debt heavy. The debt-laden company will be making interest payments on the debt over the years. (Preferred stock and convertibles that pay interest should also be considered debt for the purposes of calculating value.) So, even though the two companies have equal market caps, the company with debt is worth more.

By the same token, imagine two companies with equal market caps of $250 and no debt. One has negligible cash and cash equivalents on hand, and the other has $250 in cash. If you bought the first company for $250, you will have a company worth, presumably, $250. But if you bought the second company for $500, it would have cost you just $250, since you instantly get $250 in cash.

If a company with a market cap of $250 carries $150 as long-term debt, an acquirer would ultimately pay a lot more than $250 if he or she were to buy the company's entire stock. The buyer has to assume $150 in debt, which brings the total acquisition price to $400. Long-term debt serves effectively to increase the value of a company, making any assessments that take only the stock into account preliminary at best.

 

[Magma]

They probably would get £1b but surely nobody spends that much on a sports team

world's a bit nuts in fairness.

 

[Bojan KantKick]

There are many advantages to holding debt on your balance sheet, especially long term debt.

 

[moomba]

They hosted a game up there?

No. Only London so far.

 

[Bojan KantKick]

Should be noted that valuation models aren't a perfect science and often many are used with the median or mean used in the final analysis. Massive outliers like that Markham model would be excluded.

 

[moomba]

If it's shown to be more accurate than other models in the industry that it was developed for does it matter that it's not 100 years old or that Student Gwant and his pals in academia haven't given their stamp of appwoval?

 

[Magma]

everyone take their mind off accounting and look at this aesthetically pleasing psg kit for next season

 

[chef]

I would laugh, but we are now with Nike

 

[Art Vandelay_]

as are we.... Hopefully they can't **** up white.

 

[moomba]

Ha ha. I'm.on my phone and I thought it was the home kit in front with a hideous away kit behind.

Closer look. Sleeves. Yuk.

 

[Cruyff14]

everyone take their mind off accounting and look at this aesthetically pleasing psg kit for next season

This is one of their worst kits in a long time. It's terrible.

 

[juice t]

everyone take their mind off accounting and look at this aesthetically pleasing psg kit for next season

I like the symmetry

 

[Bojan KantKick]

If it's shown to be more accurate than other models in the industry that it was developed for does it matter that it's not 100 years old or that Student Gwant and his pals in academia haven't given their stamp of appwoval?

provide proof that it is more accurate.

 

[moomba]

Thats the claim thats been made. I have no reason to doubt that claim although I'll keep an open mind.

 

[Bojan KantKick]

So there is no proof.

Women call me the albino mandigo.

 

[moomba]

Got any proof that it's not?

Like I said, I'll keep an open mind.

 

[Bojan KantKick]

testimonies from plenty of women with the same handwriting suffice?

 

[Art Vandelay_]

**** me, get over it. It's a different model which in case you're unaware doesn't help you win shit otherwise Leicester wouldn't have won the league and dortmund would be ahead of Leipzig.

Knickers in a twist over a valuation model. Blimey.

 

[moomba]

testimonies from plenty of women with the same handwriting suffice?

So that would be a no. Phew, glad we've got that sorted out. Got a research paper downloaded on the phone which apparently details why the method is more accurate when it comes to football clubs than the others used. Will wait until I'm home though to have a read.

 

[Bojan KantKick]

So that would be a no. Phew, glad we've got that sorted out. Got a research paper downloaded on the phone which apparently details why the method is more accurate when it comes to football clubs than the others used. Will wait until I'm home though to have a read.

similar to your lack of proof then eh

 

[SM]

If it's shown to be more accurate than other models in the industry that it was developed for does it matter that it's not 100 years old or that Student Gwant and his pals in academia haven't given their stamp of appwoval?

Well it hasn't been shown to be more accurate because it uses rubbish factors of analysis. You've asked the question and had it explained about why debt increases rather than diminishes value.

 

[SM]

So that would be a no. Phew, glad we've got that sorted out. Got a research paper downloaded on the phone which apparently details why the method is more accurate when it comes to football clubs than the others used. Will wait until I'm home though to have a read.

Blimey, and here I was thinking the burden of proof was on the person putting forward the bogus claim.

Or do we also have to prove there isn't a man who lives in the moon?