Professional Documents
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Linked in
Linked in
From this sheet you will learn how to create the full-blown equity valuation
model for professional networking company LinkedIn. The model builds the
financial statements from scratch to find the equity value and also uses ratio
analysis for better understanding.
The complete structure of the model and formulas, linkages etc. have been
kept open to allow for any modification on the part of the user.
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n
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
FY 08A FY 09A FY 10A FY 11A
(500,000)
LinkedIn Summary
FY 09A 10 11 12 13 14 15
36,136 101,379 247,948 534,411 1,064,633 1,980,863 3,508,512
38,278 74,176 121,793 179,865 244,022 316,663 395,491
45,713 60,777 76,157 85,511 96,176 115,485 133,462
89,979 104,209 292,552 363,043 519,900 786,033 1,240,777
9,082 25,971 208,869 270,323 410,063 656,451 1,075,002
284 25,586 11,966 93,113 211,726 373,316 634,168
✘ Hiring Solution
✘ Marketing Solutions
✘ Stockholder's Equity
Stockholders' Equity
5.00%
0.00%
FY 08A FY 09A FY 10A FY 11A FY 12A FY 13A
-5.00%
-10.00%
FY 13A FY 14A FY 15A
15% 15% 15% Profitability Ratios
Analysis of LinkedIn
14% 14% 15%
14% 14% 15% Return on Investment Ratios
10% 10% 10%
Activity Ratios
EBITDA Margins
EBIT Margins
Return on Stockholder's Equity
Working Capital Turnover
FY 12A FY 13A FY 14A FY 15A Current Ratio
EBT Margins
Net Profit Margin
Return on Assets (ROA)
Return on Invested Capital (RoIC)
Asset Turnover Ratio
Acid Test Ratio
Assumptions
(Unless otherwise specified, all financials are in US $ Thousand) FY 07A FY 08A
Interest Rates
Interest rate on Cash Balance 4% 4%
Interest rate on Overdraft 6% 6%
FY 09A 10 11 12 13 14 15
4000% 0%
74 72 72 72 72 72 72
0%
116% 16% 181% 24% 43% 51% 58%
15 13 13 13 14 13 13
0%
21% 20% 20% 20% 20% 20% 20%
4% 4% 4% 4% 4% 4% 4%
6% 6% 6% 6% 6% 6% 6%
Assumptions
Assumptions
Revenue Build-Up
(Unless otherwise specified, all financials are in US $ Thousand) 31-Mar-09 30-Jun-09
FY 2009 FY 2009
Annual Schedule
Yearly Revenue FY 2009 FY 2010
Hiring Solution Revenue 36,136 101,379
Maketing Solution Revenue 38,278 74,176
Premium Solution Revenue 45,713 60,777
19 26 22 25 23 25 25
24 23 21 21 19 19 18
9% 9% 9% 10% 6% 6% 6%
26 26 27 27 28 28 29
17 16 15 14 14 13 12
8% 4% 4% 5% 7% 3% 3%
30 30 31 31 32 33 33
12 12 12 12 12 12 12
4% 6% 2% 2% 3%
34 35 35 36 37
12 12 12 12 12
Cost of Revenue $ US 79 74
Yearly Cost
FY 2009 FY 2010
Cost of Revenue 25,857 45,245
Sales and Marketing 26,847 55,460
Product Development 39,444 67,094
General and Administrative 19,480 34,999
30-Sep-09 31-Dec-09 31-Mar-10 30-Jun-10 30-Sep-10 31-Dec-10 31-Mar-11
FY 2009 FY 2009 FY 2010 FY 2010 FY 2010 FY 2010 FY 2011
75 142 89 90 122
Computer Equipment
Opening Balance
Addition of Asset
Removal of Asset
Closing Balance 19,699
Accumulated Depreciation 5,976
Net 13,723
Software
Opening Balance
Addition of Asset
Removal of Asset
Closing Balance 4,708
Accumulated Depreciation 1,428
Net 3,280
Intangible Assets
Patents
Opening Balance-Gross 628
Addition of Asset -
Removal of Asset -
Closing Balance-Gross 628 628
Accumulated Amortization 122
Net Patents 506
Developed Technology
Opening Balance-Gross -
Addition of Asset -
Removal of Asset -
Closing Balance-Gross - -
Accumulated Amortization -
Net -
Non-Compete Agreements
Opening Balance-Gross -
Addition of Asset -
Removal of Asset -
Closing Balance-Gross - -
Accumulated Amortization -
Net -
Workforce in Place
Opening Balance-Gross -
Addition of Asset -
Removal of Asset -
Closing Balance-Gross - -
Accumulated Amortization -
Net -
Amortization Expense
Patents 122
Developed Technology -
Non-Compete Agreements -
Workforce -
Total Amortization Expense 122
209 210 87 - - - -
- 267 862 862 215 - -
- 67 231 126 - - -
- 426 1,619 1,214 - - -
209 970 2,799 2,202 215 - -
Operating
Net Profit Margin
Expense
divided by
169,615 5.5%
-
- 236,332
-
Tax Expense
8,699
-
Others
multiplied by
-
Sales
236,332
Total Asset
Current Assets
Turnover
158,414 divided by 1.24
+
Net Fixed Assets
Total Assets
(PPE)
32,592 191,006
Balance Sheet
Total Liabilities
77,054
Current Liabilities
Total Liab + SE =
76,526
+ Total Assets
+ 191,006
Long Term Debt
Stockholder
528
Equity (SE) divided by
113,952
Common stock
equity
113,952
Return on Total Assets
(ROA)
6.8%
Return on
Common Equity
multiplied by (ROE)
11.4%
Financial Leverage
multiplier
1.68
Income Statements
(Unless otherwise specified, all financials are in US $ Thousand) FY 07A FY 08A
Revenue
Hiring Solutions 7,467 17,352
Marketing Solutions 7,780 25,972
Premium Subscriptions 17,239 35,449
Total Revenue 32,486 78,773
Expenses
Cost of Revenue 7,384 18,589
Sales and Marketing 5,037 16,986
Product Development 11,578 29,366
General and Administrative 6,812 12,976
Depreciation and Amortization 2,107 6,365
Total Expenses 32,918 84,282
- - - - - - -
Cash/Overdraft 80,495
4% 4% 4% 4% 4% 4% 4%
6% 6% 6% 6% 6% 6% 6%
No. of Shares
Reedemable Convertible Preferred Stock
Opening Balance - 4,357,644
Series C 4,357,644 -
Series D - 6,599,987
Clossing Balance 4,357,644 10,957,631
Common Stock
Opening Balance 34,779,864 42,417,258
Issuance of Common Stock 8,286,424 1,048,310
Repurchase 649,030 1,552,467
Clossing Balance 42,417,258 41,913,101
Amount
Reedemable Convertible Preferred Stock
Series C
Opening Balance (100) 12,700
Addition during the year 12,800 -
Removal during the year - -
Closing Balance 12,700 12,700
Series D
Opening Balance - -
Addition during the year - 75,281
Removal during the year - -
Closing Balance - 75,281
Warrants 15 15
Common Stock
Opening Balance 3 3
Issuance of Common Stock - -
Repurchase - -
Clossing Balance 3 3
Additional Paid in Capital
Opening Balance 292 2,592
Issuance of Common Stock 327 778
Vesting Early Excercised Stock Options 133 913
Repurchase - 3,197
Stock Based Compensation 1,840 4,692
Clossing Balance 2,592 5,778
Accumulated Deficit
Opening Balance (11,762) (11,434)
Cummulative Effect of Accounting Change - (3,220)
Net Income 328 (1,302)
Closing Balance (11,434) (15,956)
- - - - - - -
(3)
Assets
Fixed Assets
Gross Block 31,182
Less: Accumulated Depreciation 9,458
Net Block 21,724
Intangible Assets
Gross Block 628
Less: Accumulated Amortization 122
Net Block 506
Liabilities
Current Liabilities
Overdraft -
Accounts Payable 2,510
Accrued Liabilities 10,224
Deferred Revenue 14,858
Income Tax Payable 133
Deferred Tax Liabilities 731
Total Current Liabilities 28,456
Net Worth
Redeemable Convertible Preferred Stock
Series C 12,700 12,700
Series D - 75,281
Total RCPS 12,700 87,981
Stockholders Equity
Convertible Preferred Stock 15,413
Warrants Issued 15
Common Stock 3
Additional Paid in Capital 5,778
Accumulated Other Comprehensive Loss (23)
Accumulated Deficit (15,956)
Total Stockholders Equity 5,230
Check 1
FY 09A 10 11 12 13 14 15
- - - - - - -
4,919 8,604 16,233 29,117 52,740 88,533 148,421
18,352 18,352 18,352 18,352 18,352 18,352 18,352
25,450 47,323 89,286 160,148 285,382 484,930 812,122
552 552 552 552 552 552 552
1,695 1,695 1,695 1,695 1,695 1,695 1,695
50,968 76,526 126,118 209,864 358,721 594,062 981,141
1 1 1 1 1 1 1
Cashflow Statement
(Unless otherwise specified, all financials are in US $ Thousand) FY 07A FY 08A
Check
FY 09A 10 11 12 13 14 15
133 - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
(15) - - - - - -
1 - 175,000 - - - -
7,947 - - - - - -
20 3 - - - - -
(3,537) - - - - - -
4,549 3 175,000 - - - -
1 1 1 1 1 1 1
Ratios & Valuations
Profitability Ratios
EBITDA Margins 5% 1%
Activity Ratios
Asset Turnover Ratio 0.65
74 72 72 72 72 72 72
P/ E (x)
Peer Group Company FY12E
Google 22.5x
EBAY 23.1x
Amazon 71.4x
Baidu 76.9x
Oracle 23.8x
Mean 43.5
Median 23.8
Share Price a
EV/ EBITDA (x)
P/E (x) Multipl
P/BV (x) Multip
Price from Discounted Cash Flow
FY 09A 10 11 12 13 14 15
S
Football Field
30.4
67.6
65.7
Share Price
67.6
65.7
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