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Fcffeva
Fcffeva
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
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