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Valuation Mod-2 Oil and Gas Field Services

Valuation Mod-2 Oil and Gas Field Services. Chris Jennis 1/22/2014. Enterprise Assets & Liabilities Business activites undertaken by company Financing Assets & Liabilities Borrowing or lending activities Key to separate the two so we know value of companies operations.

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Valuation Mod-2 Oil and Gas Field Services

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  1. Valuation Mod-2Oil and Gas Field Services Chris Jennis 1/22/2014

  2. Enterprise Assets & Liabilities • Business activites undertaken by company • Financing Assets & Liabilities • Borrowing or lending activities • Key to separate the two so we know value of companies operations

  3. ENTERPRISE Assets and Liabilities

  4. 2 3 4 • Cash 2012: 2% X 42,149= $843 enterprising; $1,905-$843= $1062 excess cash • 2%= 1/52 • Accounts receivable arise due to the sales of outputs from enterprise operations • Inventories are what are being sold. Issues will be looked at in Mod 10 • Deferred tax is assumed to be enterprise until Mod 10

  5. 5. Other current assets: Magnitude is unknown so include as enterprise asset 6. Fixed Income Investments: Held to maturity and used in operations 7. Affiliated Company Investments: common companies

  6. 8 9 10 8. Goodwill: Necessary for the enterprise operations to be carried out 9. Intangible Assets: Necessary for the enterprise operations to be carried out 10. Other Assets: insufficient information about what is included

  7. 1 2 3 4 Accounts Payable: arise from normal enterprise operations Accrued Liabilities: Enterprising in nature Postretirement Benefits: Employees part of operations Other Liabilities: Do not know component so consider enterprising

  8. Financing Assets and Liabilities

  9. 1 2 3 Long-term debt: Claims by debt holders Short-term borrowings: Arise because of managements choice of funding Dividends: Related to financing rather than operations

  10. Check

  11. Checking Work: NEA - NFL = CSE 45,794 - 11043 = 34,751

  12. Enterprising Financing Revenue, cost of revenue, G&A, R&E, Restructuring are all associated with enterprise operations of Schlumberger. Interest expense is a payment to debt holders Interest income is earning accruing from excess cash in the company Other: Assume enterprise Adjust

  13. Enterprising Financing Translation adjustments indicate global production. Unrealized gains represent changes in values of securities which don’t impact enterprise. Noncontrolling interest: Not enterprise

  14. Allocation of Income Taxes on Continuing Operations Step 1: Enterprise income from continuing operations before tax Step 2: Financing income from continuing operations before tax

  15. Allocation of Income Taxes on Continuing Operations Step 3: Calculate taxes for Enterprise and Financing

  16. Checking Work:

  17. Summary • Review: • Net Enterprise Assets (NEA) • Net Financial Liabilties (NFL) • Enterprise Profit After Tax (EPAT) • Financing Expense After Tax (FEAT) • Issues • Pension and other postretirement benefit plans • In Consolidated statement of comprehensive income • Deferred income taxes, other current assets, etc

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