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    FCFF Template

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    Rizqi Harry
    This document provides an example of calculating free cash flow to the firm (FCFF) for valuing Alibaba's IPO. It includes: 1) Historical and projected financial statements including EBIT, depreciation, capital expenditures, and changes in working capital to calculate FCFF for 2010-2022. 2) Discounting the explicit period (2015-2019) FCFF projections at 9% to get a net present value of $321.9 billion. 3) Calculating a $812.1 billion terminal value in 2019 using a perpetual 3% growth rate, then discounting to net present value. 4) Summing the NPVs to determine an enterprise value of

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    FCFF Template

    Uploaded by

    Rizqi Harry
    43 views8 pages
    This document provides an example of calculating free cash flow to the firm (FCFF) for valuing Alibaba's IPO. It includes: 1) Historical and projected financial statements including EBIT, depreciation, capital expenditures, and changes in working capital to calculate FCFF for 2010-2022. 2) Discounting the explicit period (2015-2019) FCFF projections at 9% to get a net present value of $321.9 billion. 3) Calculating a $812.1 billion terminal value in 2019 using a perpetual 3% growth rate, then discounting to net present value. 4) Summing the NPVs to determine an enterprise value of

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    Free Cash Flow to Firm

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    FCFF-Template

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    This document provides an example of calculating free cash flow to the firm (FCFF) for valuing Alibaba's IPO. It includes: 1) Historical and projected financial statements including EBIT, depreciation, capital expenditures, and changes in working capital to calculate FCFF for 2010-2022. 2) Discounting the explicit period (2015-2019) FCFF projections at 9% to get a net present value of $321.9 billion. 3) Calculating a $812.1 billion terminal value in 2019 using a perpetual 3% growth rate, then discounting to net present value. 4) Summing the NPVs to determine an enterprise value of

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    43 views8 pages

    FCFF Template

    Uploaded by

    Rizqi Harry
    This document provides an example of calculating free cash flow to the firm (FCFF) for valuing Alibaba's IPO. It includes: 1) Historical and projected financial statements including EBIT, depreciation, capital expenditures, and changes in working capital to calculate FCFF for 2010-2022. 2) Discounting the explicit period (2015-2019) FCFF projections at 9% to get a net present value of $321.9 billion. 3) Calculating a $812.1 billion terminal value in 2019 using a perpetual 3% growth rate, then discounting to net present value. 4) Summing the NPVs to determine an enterprise value of

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 8

    Free Cash Flow to Firm Example

    Prepared by Dheeraj Vaidya


    www.wallstreetmojo.com
    Example: FCFF
    Alibaba IPO
    FCFF Valuations

    Free Cash Flow Projections Historicals


    (RMB in Million Except Per Share Amount Mar-10 Mar-11 Mar-12

    EBIT (873) 1,322 5,015


    Free Cash Flow to Firm
    EBIT x (1-t) (1,420) 1,099 4,252
    Add: Depreciation & amortization 715
    Less: Capex (749)
    Add: Change in working capital
    FCFF

    Free cash flow to firm of explicit period (2015E to 2019E)


    Mar-10 Mar-11 Mar-12
    Cash Flows
    NPV of explicit period 321,953

    Terminal value @ perpetual growth (2019) Mar-10 Mar-11 Mar-12


    Terminal value as of 2019
    NPV of terminal value 812,148

    DCF Valuation Summary

    DCF calculation as of Valuation (RMB) Valuation (US$)


    NPV of explicit period 321,953 51,791
    NPV of terminal value 812,148 130,646
    Enterprise Value 1,134,100 182,437
    + Cash $48,550 7,810
    - Debt ($40,310) (6,484)
    Equity value 1,142,340 183,851
    + Short term investments, restricted cash, investment s 12,587 2,025
    +Investment in equity investees 13,009 2,093
    + Alipay valuation 24,866 4,000
    Stock Option Value $3,207 516
    Adjusted Equity Value 1,189,595 191,452
    Share Price 486.21 78.25

    Sensitivity Analysis

    191.45 7%
    1% 214.44
    2% 245.93

    growth
    3% 293.17
    4% 371.91
    5% 529.38
    6.0% 1,001.78
    toricals Forecasts
    Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

    10,751 26,514 33,072 41,871 53,260

    9,202 24,575 29,103 36,009 45,271


    805 947 2,691 5,069 8,089
    (1,046) (3,010) (9,225) (11,679) (14,855)
    4,285 2,260 3,884 4,861 6,292
    13,246 24,772 26,453 34,261 44,795

    Mar-13 Mar-14 Mar-15 Mar-16 Mar-17


    26,453 34,261 44,795

    Mar-13 Mar-14 Mar-15 Mar-16 Mar-17


    0 0 -

    Cost of Capital 9.00%


    Infinite growth rate 3.00%
    WACC
    8% 9% 10% 11%
    181.46 156.87 137.87 122.78
    202.53 171.69 148.69 130.90
    232.04 191.45 162.59 141.05
    276.31 219.12 181.13 154.10
    350.08 260.61 207.08 171.50
    497.62 329.78 246.01 195.86
    recasts
    Mar-18 Mar-19 Mar-20 Mar-21 Mar-22

    68,042 86,110 99,367 109,558 115,580

    57,155 70,610 79,493 85,455 86,685


    11,938 16,831 22,717 29,348 36,493
    (18,979) (24,018) (27,716) (30,558) (32,238)
    8,167 9,982 7,324 5,630 3,327
    58,282 73,405 81,819 89,875 94,267

    Mar-18 Mar-19 Mar-20 Mar-21 Mar-22


    58,282 73,405 81,819 89,875 94,267

    Mar-18 Mar-19 Mar-20 Mar-21 Mar-22


    - - - - 1,618,255

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