IB Technicals 2: Cash Flow and the Cost of Capital

Accounting is transaction language. One number changes, and the question is whether you can walk it through all three statements. The version that works in the room is short. Jump to pre-tax income, tax-effect it, land on net income, add back what is not cash, and finish on a balance sheet that balances. Once that walk is automatic, the harder versions stop being new questions: depreciation, a purchase with cash, a sale on credit, working capital going up while the income statement looks fine. The second half of the night is the cost of money, because valuation cannot start without it. Time value, what a discount rate is, why debt is cheaper than equity and why a company still does not fund itself entirely with debt, and what beta is doing inside the cost of equity. What we'll cover: - The $10 of depreciation walk, and the pre-tax income shortcut that keeps it short - Why depreciation gets added back, and the tax shield underneath it - Buying a car with cash, and selling $100 of product on credit - What working capital is, and why an increase consumes cash - EBITDA to unlevered free cash flow, and why EBITDA is not cash - Time value of money, cost of debt versus cost of equity, and why you unlever and relever beta Want to know how you hold up when the question changes shape? I run a 90-minute mock interview, a full simulation and then rapid-fire technicals on whatever broke. Book a free 15-minute intro to see if it is a good fit. Part 2 of IB Technicals, a six part run on Tuesdays and Thursdays. Each night covers how the concept works and, more importantly, how to actually answer the questions on it, with the stories and details behind them. Each one stands alone, so jump in anywhere. I'm the founder of OFFERGOBLIN and ex-Centerview tech.