I am learning about how to apply EPV (earnings power value) analysis in the valuation of a company and hence it's shares. I am using this book as a guide, and after the calculation of adjusted earnings, the author suggests adding to this value, the net quantity of cash and the debt payable in a year. Further into the book the author uses the firm WD-40 as an example and enters a quantity known as "Long term debt payable in a year". As I am attempting to build my own worked example using Marshalls Plc (MSLH) as a guide, I wondered if any Lemon Fools could help me in establishing this figure with their economic position in mind.
Please note that I am deriving my figures from here:
https://www.marshalls.co.uk/documents/r ... report.pdf
In the above document, obvious entries for debt can be seen in the Balance Sheet on page 74. Firstly from the Current (short term/payable within a year) Liabilities:
Interest-bearing loans and borrowings (15) 35
and also in the Non-current Liabilities:
Interest-bearing loans and borrowings (15) 44,107
whilst it is tempting to just use the value in the "current liabilities" section, the book I referred to above does actually mention this term "Long term debt payable in a year", and furthermore, in my opinion, if there is a sum in the LT debt which needs clearing in less than 12 months, then this should be considered in an such an EPV. (This does beg a quiet question in my mind as to why financial statements in general, the accountant does not explicitly move the year-payable portion of LT debt into Current liabilities etc.).
So to further explore this quandary I followed note 15 on page 100, where I found 2 separate entries for the bank loan comprising the long term debt, firstly within "Effective interest rates and maturity of liabilities":
* % Total 6 months 6-12 months 1-2 years 2-5 years
Bank loans Variable 1.97 43,883 – 14,500 24,239 5,144
and also "At 31 December the undiscounted outstanding contractual payments (including interest) of financial liabilities were as follows:"
* Carry Total 6 months 6-12 months 1-2 years 2-5 years
Bank loans Variable 43,883 44,519 244 14,665 24,427 5,183
So given the information disclosed in the note referred to above, would I be correct to assume that 244 must be paid within the next 6 months and that 14,665 must be paid within 6-12 months?
So in conclusion, for the total debt "payable within a year", should I deduct from the cash position 35 (from the current liabilities) and 244+14665 (from the non-current liabilities)?
Matt