Financial modelling - Need to Know Lease adjustment
Financial modelling is an art to represent financials of companies in meaningful manner. It helps to analysis company performance based on various factors such as profitability, liquidity analysis, cost benefit analysis. It also use to project future cash flow of the company and valuing company. In the process of valuation lease play an important part, today we are discussing that. In financial modeling training, we explain how to adjust lease in Enterprise value calculation. A lease is an authorized agreement in which the owner of an asset rent to a lessee. We examine long-term leases in which the lessee lives with the asset till the term of the agreement. In financial terms, the leases are considered as alternatives to purchasing an asset with debt, and leases act as an income for the lessee. Regardless of how the asset is held, the operating inflows and outflows from the equipment are unaffected by its ownership. The owner handles the responsibility for maintaining the eq...