Is the Coles demerger a good idea?
Recently, Wesfarmers Limited (ASX: WES) announced its intention to demerge the Coles business into a separate ASX-listed company. While WES will retain up to a 20 per cent stake in Coles, the demerger effectively splits the company into two separate entities, with WES owning Bunnings, Kmart, Target, and Officeworks, as well as WES’ Industrials and “Other” divisions.
Tim joined Montgomery in July 2012 and is a senior member of the investment team. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Tim focuses on quant investing and market-neutral strategies.
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Anthony
:
I have a question, about cashflows. I already know about cashflow statements from Accounting 101, my question is how do you calculate a value from a cashflow statement and do you get the cashflow statement from the annual report?
Thank you
Anthony of Belfield
Tim Kelley
:
Hi Anthony. Doing a cash flow based valuation of the sort we use is quite involved, and beyond the scope of a blog poast. A good refernce would be this book by McKinsey&Co: http://www.amazon.com/Valuation-Measuring-Managing-Companies-Finance/dp/0470424656/
If you want a relatively simple approach, Roger’s book “Value.Able” migth be helpful.
Anthony
:
Dear Tim,
Thank you for referring to Roger’s book and the McKinsey Book.
Regards
Anthony LLB(UNSW) of Belfield