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Industrials - Analysis and Modeling

What makes industrials distinct from other sectors, and applies a range of sector-specific techniques.

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33 Lessons (127m)

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  • Description & Objectives

  • 1. Industrials Companies Overviews and Valuations | Interactive Video

  • 2. Introduction to Sector Players

    01:17
  • 3. What Makes Industrials Special

    03:25
  • 4. Backlog

    02:13
  • 5. Backlog Workout

    04:34
  • 6. Original Equipment (OE) vs. After Market (AM) Revenue

    02:04
  • 7. Contracts

    01:59
  • 8. Contracts Workout

    05:17
  • 9. Research and Development (R&D)

    01:17
  • 10. Research and Development (R&D) Workout

    04:58
  • 11. Financing Segment and Sum of the Parts

    02:04
  • 12. Financing Segment and Sum of the Parts Workout

    04:55
  • 13. Pensions in the Industrial Sector

    01:49
  • 14. Pensions in Chemicals Sector Workout

    08:07
  • 15. Industrial Company Example Financials

    01:47
  • 16. Industrial Sector Metrics

    00:59
  • 17. Kion Model - Introduction

    02:46
  • 18. Kion Model - Segments ITS Part 1

    07:08
  • 19. Kion Model - Segments ITS Part 2

    07:14
  • 20. Kion Model - Segments SCS

    04:42
  • 21. Kion Model - Segments Corporate

    02:38
  • 22. Main Kion Model Intro and Assumptions

    03:45
  • 23. Kion Model - Income Statement

    08:17
  • 24. Kion Model - Depreciation

    03:03
  • 25. Kion Model - Research and Development (R&D)

    04:46
  • 26. Kion Model - Total EBIT

    09:54
  • 27. Kion Model - Balance Sheet Assets

    04:02
  • 28. Kion Model - Balance Sheet Liabilities and Equity

    01:24
  • 29. Kion Model - Cashflow Statement

    06:08
  • 30. Kion Model - Interest and Circularity

    04:10
  • 31. Kion Model - Metrics

    03:15
  • 32. Kion Model - Valuation

    05:01
  • 33. Kion Model - IFRS vs. US GAAP

    02:56

Kion Model - Segments Corporate

  • Notes
  • Questions
  • Transcript
  • 02:38

How to consolidate segment revenues for an industrial company, Kion.

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Transcript

We've worked out the revenue and EBITDA for the segments ITS and SCS.

We now would like to unify that into total revenue, and we're going to have to deal with a tricky area of reporting.

What's happening within Keon is that the segments are reporting revenue, but some of that revenue will be to other segments.

So for example, ITS might be supplying trucks to SCS to provide as part of their contract, they might be registering that as revenue, despite it being revenue within the group.

That revenue has now inflated the overall view of revenue because it's intragroup revenue I sale from one part of the business to another.

What will happen is we will then have some of the revenue, which is not real from the point of view of an external investor, and it needs to be eliminated.

We also have perhaps some services being bought from headquarters.

Perhaps there's a charge for it or other support functions, which also needs to be eliminated.

We'll also need to do the same thing for costs down here, but we won't be able to do that yet because we can't get to EBIT.

So for the moment, let's do the eliminations for corporate, for revenue.

The way we're going to do it is we're going to find the overall revenue of both segments.

Here's ITS and we're going to add SCS.

That means overall we have this revenue here, and we're going to say that historically the eliminations represented about 0.1%.

That's the forecast that we're going to roll forwards, and we're going to say that we're going to eliminate, not 0.1%, and that leads to total revenue with careful summing of the following.

What we've now got is nice clean revenue that's all to external third parties and has eliminated any interactions within the group parts of the business that are selling to each other.

That's all we can do for the time being on this tab, and that's because to do EBIT and other items like this, we're going to need to finish the model so that we can get overall depreciation.

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