Читать книгу The Value Equation - Christopher H. Volk - Страница 16

When conceiving a corporate capital stack, there is an order of operations. At a high level, your analysis should begin with how much you can borrow, and then back into how much equity investment you might need. In the example of FUBU, Daymond John had no access to corporate borrowings when he founded the company. So, he made a $120,000 equity investment into FUBU that was funded by a personal loan he had to collateralize with his home. That small, but meaningful, investment ended up generating over $6 billion in revenues, ultimately making Daymond John an amazing financial success story. Over my years in business, I have seen similar success stories and have been proud to play a role in our customers' achievements.

As a finance professional, I do not think personally about borrowings when considering how a business should be capitalized. That is too simplistic. Instead, I think about “other people's money” (OPM). For instance, STORE Capital is in the business of owning the profit-center real estate of companies and then leasing it to them on a long-term basis. There are numerous companies that use a lot of real estate in their business (think restaurants, fitness clubs, retailers, and many more) and they have a problem to solve. They could own the real estate and seek bank financing, or they could instead lease the real estate from a company like STORE.

Real estate ownership requires an equity investment that can typically range as high as 40%, paired with borrowings for the remaining 60% plus. The alternative is to have a company like STORE put up all the money for the real estate, buy it, and then lease it back to you on a long-term lease. The amount of OPM entailed is different. A real estate lease offers far more OPM than does the choice of real estate ownership. Yet both are viable choices when it comes to creating a corporate capital stack.

As a self-described “finance guy,” I could care less about the accounting treatment of my capital stack. My attention tends to turn in the direction of equity returns, corporate flexibility, liquidity, and margins for error, which are important keys to value and wealth creation. I find that most corporate CEOs feel likewise. Hence, some will choose to own equipment or real estate, while others will elect to lease equipment and real estate. Either way, these decisions impact the corporate OPM and equity mix. They impact the capital stack.

Accountants like to include within company liabilities non-interest-costing obligations, such as trade payables, deposits (deferred income), and accrued liabilities. As a finance guy, I ignore such liabilities within the corporate capital stack. Since they cost nothing to me, I subtract them from the amount I would otherwise have to make to determine business investment, the first of the Six Variables, which was discussed in the preceding chapter.

Borrowings at cost are generally visible on a corporate financial statement, while the cost of leased assets is nowhere to be seen. Accountants have always been obsessed with lease accounting, which embodies why accounting is always going to be an imperfect reflection of financial reality. For most of my career, real estate leases were not included on a balance sheet at all. They just showed up in the form of rent expense, and required a detailed financial statement footnote disclosure explaining how much in lease payments the company was obligated to pay over time. All of this changed with new accounting rules imposed in 2019.

GAAP Lease Accounting

	Old Rules	2019 Rules
Show an Asset?	No	Yes
Show a Liability?	No	Yes
Show OPM Proceeds?	No	No

In 2019, new lease accounting standards set by the Financial Accounting Standards Board (FASB) were enacted, resulting in the creation of non-cash “right to use” assets and liabilities, representing the estimated present values of lease payment obligations.¹ Since a lease is generally not a debt substitute, but instead a debt and equity substitute, the amount of the “right to use” liability and asset created will typically not approximate the actual amount of the OPM represented by your decision to lease.