Pro forma forecasts
Subscription services via the Internet provide information on nearly
anything anybody might need. Such information can be particularly
useful to see what a company has been doing since its last published
annual report. For example, a company could have changed its corporate
structure, dismissed certain members of management, sold or acquired a
subsidiary, entered into an alliance or cooperative agreement with a com-
petitor to market or distribute a product, or availed itself of the services
of a rival bank in closing a transaction.
One such on-line database is AMADEUS. AMADEUS (Analyse MAjor
Database from EUropean Sources) is a comprehensive, pan-European
database containing financial information on 7 million public and
private companies in 38 European countries. It combines data from over
30 information providers (IPs). AMADEUS is a modular product; you can
choose the level of coverage that you require – the top 250,000 com-
panies, the top 1.5 million, or all companies. AMADEUS is available on
CD/DVD-ROM, as an intranet feed and on the Internet.
AMADEUS is exclusive to BvDEP and its information providers, and is not
available via any other platform. BvDEP identifies the best source of
information in each country and applies strict inclusion criteria to
prevent any bias in coverage.
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Pro forma forecasts using AMADEUS electronic databases
A standard company report includes:
■ twenty-two balance sheet items
■ twenty-five profit and loss account items
■ twenty-six ratios
■ descriptive information, including trade description and activity codes
(NACE 1, NAICS or US SIC can be used across the database)
■ ownership information, which is researched by BvD’s own team of
■ Reuters’ news, security and price information
■ links to an executive report with integral graphs
■ a report comparing the financials of the company’s default peer group.
In addition to the existing ratios you can also create your own, which you
can display in the reports and also use in your searches and analyses.
Each company is part of a default peer group based on its activity codes,
and integral graphs illustrate its position in this peer group. A company
tree diagram instantly illustrates the structure of the group.
The advantage of AMADEUS is that it provides the ability to undertake peer
group analysis. Typically it comes to the fore when there is a wealth of data
to work with. The financial ratios calculated on the spreadsheet can be
compared with published data, such as lists of industry standard ratios.
The problem here is that you do not know how the spreadsheets and
resulting calculations from the published sources have been arrived at,
which would render comparison between the published work and the
analysts’ spreadsheet meaningful.
The screencap in Figure 6.1 illustrates the company search mechanism.
Such on-line databases are rapidly supplanting traditional paper-based
annual reports and idiosyncratic and heterogeneous spreadsheet models.
The on-line database can be accessed by web browser, and reports con-
verted into exportable RTF or XL format for subsequent manipulation.
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Cash Flow Forecasting
Forecasts can therefore be prepared quickly by extracting the financial
statements for, say, two companies, and combining them into a spread-
sheet model (see Chapter 4) to effect hypothetical merger projections.
It should be remembered, however, that you become completely depend-
ent on the accuracy of the accounts classified by BVD into its database.
Here, we provide the full spreadsheet for a major EU corporate,
Vodafone, the mobile telephone operator (see Table 6.1).
Figure 6.1 The company search mechanism
Source: Bureau Van Dijk, AMADEUS 2004
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