Page 1

INPUTSFORVALUATION
CurrentInputs
Enterthecurrentrevenuesofthefirm=
Entercurrentcapitalinvestedinthefirm=
Enterthecurrentdepreciation=
Enterthecurrentcapitalexpendituresforthefirm=
EnterthechangeinWorkingCapitalinlastyear=
Enterthevalueofcurrentdebtoutstanding=
Enterthenumberofsharesoutstanding=

$12,406
$20,000 {Asanaveestimate,youcanuseBVofdebt+BVofEquity)
$233
$298
$115
$
1,500.00

HighGrowthPeriod

YourInputs

Enterthegrowthrateinrevenuesforthenext5years=

25.00%

Whatwillalloperatingexpensesbeasa%ofrevenuesinthefifthyear?

70.00% (Operatingexpensesincludedepreciation:Thisisequalto(1PretaxOperatingMargin))

Howmuchdebtdoyouplantouseinfinancinginvestments?
Enterthegrowthrateincapitalexpenditures&depreciation
Enterworkingcapitalasapercentofrevenues
Enterthetaxratethatyouhaveoncorporateincome
Whatbetadoyouwanttousetocalculatecostofequity=

0%
25.00%
7.50%
36.00%
1.25

Enterthecurrentlongtermbondrate=

6.50%

Enterthemarketriskpremiumyouwanttouse=

5.50%

Enteryourcostofborrowingmoney=

8.50%

StablePeriod
Enterthegrowthrateinrevenues=
Enteroperatingexpensesasa%ofrevenuesinstableperiod=
Entercapitalexpendituresasapercentofdepreciationinthisperiod

6.00%
75.00%
200.00% Seecapitalexpenditureworksheet(capex.xls)fordetails.

Howmuchdebtdoyouplantouseinfinancinginvestments?

5.00%

Enterinterestrateofdebtinstableperiod=

7.50%

Page 1

Page 2

Whatbetadoyouwanttouseinthestableperiod=

1.10
ESTIMATEDCASHFLOWS

10

GrowthinRevenue

Base

25.00%

25.00%

25.00%

25.00%

25.00%

21.20%

17.40%

13.60%

9.80%

6.00%

GrowthinDeprec'n

25.00%

25.00%

25.00%

25.00%

25.00%

21.20%

17.40%

13.60%

9.80%

6.00%

Revenues

$12,406 $15,508 $19,384 $24,230 $30,288 $37,860 $45,886 $53,871 $61,197 $67,194 $71,226

OperatingExpenses
%ofRevenues

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

71.00%

72.00%

73.00%

74.00%

75.00%

$OperatingExpenses

$8,684 $10,855 $13,569 $16,961 $21,202 $26,502 $32,579 $38,787 $44,674 $49,724 $53,420

EBIT

$3,722 $4,652 $5,815 $7,269 $9,086 $11,358 $13,307 $15,084 $16,523 $17,471 $17,807

TaxRate

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

36.00%

EBIT(1t)

$2,382 $2,977 $3,722 $4,652 $5,815 $7,269 $8,517 $9,654 $10,575 $11,181 $11,396

+Depreciation

$233 $291 $364 $455 $569 $711 $862 $1,012 $1,149 $1,262 $1,338

CapitalExpenditures

$298 $373 $466 $582 $728 $909 $1,263 $1,616 $1,969 $2,322 $2,675

ChangeinWC

$115 $233 $291 $363 $454 $568 $602 $599 $549 $450 $302

=FCFF

$2,202 $2,664 $3,329 $4,162 $5,202 $6,503 $7,514 $8,451 $9,206 $9,671 $9,756

Page 2

Page 3

TerminalValue(in'05)

$167,813
COSTSOFEQUITYANDCAPITAL

CostofEquity
ProportionofEquity
AftertaxCostofDebt
ProportionofDebt
CostofCapital
CumulativeWACC

PresentValue

13.38%

13.38%

13.38%

13.38%

13.38%

13.21%

13.05%

12.88%

12.72%

10
12.55%

100.00%

100.00%

100.00%

100.00%

100.00%

99.00%

98.00%

97.00%

96.00%

95.00%

5.44%

5.44%

5.44%

5.44%

5.44%

5.31%

5.18%

5.06%

4.93%

4.80%

0.00%

0.00%

0.00%

0.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

13.38%

13.38%

13.38%

13.38%

13.38%

13.13%

12.89%

12.65%

12.40%

12.16%

113.38%

128.54%

145.73%

165.22%

187.32%

211.92%

239.23%

269.48%

302.91%

339.75%

$2,349 $2,590 $2,856 $3,149 $3,472 $3,546 $3,532 $3,416 $3,193 $52,265

FIRMVALUATION
ValueofFirm

$80,367

ValueofDebt

ValueofEquity

$80,367

ValueofEquityperShare

$53.58

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

ValueofFirmbyyear

$80,367 $88,453 $96,954 $105,760 $114,703 $123,542 $132,250 $140,844 $149,448 $158,314

$ValueofDebt

$ $ $ $ $ $1,235 $2,645 $4,225 $5,978 $7,916

Page 3

EVA Valuation

EBIT(1t)
WACC(CI)
EVA
TerminalEVA
PV
PVofEVA
+CapitalInvested
+PVofChgCapitalinYr10
=FirmValue
WACC
ROC
CapitalInvested
CalculationofCapitalInvested
Initial
+NetCapEx
+ChginWC
Ending
CumulatedWACC

Base
1
2
3
4
$2,382 $2,977 $3,722 $4,652 $5,815
$2,675 $2,717 $2,769 $2,835
$302 $1,005 $1,883 $2,980
$267 $782 $1,292 $1,804
$60,463
$20,000
$(96) Thisreconcilestheassumptionsonstablegrowth,ROCandCapitalInvested

$80,367
13.38%
13.38%
13.38%
13.38%
14.89%
18.32%
22.47%
27.44%
$20,000 $20,314 $20,706 $21,197

$20,000 $20,000
$81
$233
$20,000 $20,314

$20,314
$102
$291
$20,706

$20,706
$127
$363
$21,197

$21,197
$159
$454
$21,810

113.38%

128.54%

145.73%

165.22%

Page 4

EVA Valuation

5
6
7
8
9
10
$7,269 $8,517 $9,654 $10,575 $11,181 $11,396
$2,917 $2,964 $3,039 $3,134 $3,244 $3,364
$4,352 $5,552 $6,615 $7,441 $7,938 $8,032
$138,838
$2,323 $2,620 $2,765 $2,761 $2,620 $43,229

andCapitalInvested

13.38%
13.13%
12.89%
12.65%
12.40%
12.16%
33.33%
37.72%
40.94%
42.67%
42.76%
41.20%
$21,810 $22,576 $23,579 $24,782 $26,151 $27,661

$21,810
$198
$568
$22,576

$22,576
$401
$602
$23,579

$23,579
$604
$599
$24,782

$24,782
$820
$549
$26,151

$26,151
$1,060
$450
$27,661

$27,661
$1,338
$302
$29,301

187.32%

211.92%

239.23%

269.48%

302.91%

339.75%

Page 5

EVA Valuation

TerminalYear
$12,080
$3,524
$8,556

12.16%
41.69%
$28,975 (AdjustedtoreflectterminalROC)

Page 6