Money Mavericks: Confessions of a hedge fund manager (Financial Times Series)

by Lars Kroijer

When you try to separate out the stake Company A owns in listed Company B, what role does minority interest on the balance sheet of Company A play in finding the deconsolidated financial statements? French company Renault has a large stake in Japanese Nissan. Discuss currency exposures and what you could do to limit them. Suppose Renault guaranteed Nissan’s debt: how would you think about the magnitude of this potential liability? A company changes depreciation of an asset from 10 to 12 years. What will this mean to its stated cash flows and earnings? What does it mean to cash flow and earnings if you change AR (accounts receivable) days from 25 to 35 next year? Company A has a large unfunded pension liability. Is this a real liability? Should it be counted as debt? If you know that the net deficit is $10 million, do you care about gross assets and liabilities? What else do you want to find out? What is ‘duration’ in the context of bonds? Does a bond have beta exposure to a market?