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Complete Financial Model
Complete Financial Model
Complete Financial Model
Assumptions
Base Case
Revenue Growth (% Change)
Cost of Goods Sold (% of Net Revenue)
Salaries and Benefits (% of Net Revenue)
Rent and Overhead (Y-O-Y Change)
Depreciation & Amortization (% of opening PP&E)
Interest (% of Debt)
Tax Rate (% of Earnings Before Tax)
Accounts Receivable (Days)
Inventory (Days)
Accounts Payable (Days)
Capital Expenditures
Debt Issuance (Repayment)
Equity Issued (Repaid)
Dividend Payout ( as a % of net income)
Dividend distribution tax (as a percentage of dividend)
Bear Case
Revenue Growth (% Change)
Cost of Goods Sold (% of Net Revenue)
Salaries and Benefits (% of Net Revenue)
Rent and Overhead (Y-O-Y Change)
Depreciation & Amortization (% of opening PP&E)
Interest (% of Debt)
Tax Rate (% of Earnings Before Tax)
Accounts Receivable (Days)
Inventory (Days)
Accounts Payable (Days)
Capital Expenditures
Debt Issuance (Repayment)
Equity Issued (Repaid)
Dividend Payout ( as a % of net income)
Dividend distribution tax (as a percentage of dividend)
Bull Case
Revenue Growth (% Change)
Cost of Goods Sold (% of Net Revenue)
Salaries and Benefits (% of Net Revenue)
Rent and Overhead (Y-O-Y Change)
Depreciation & Amortization (% of opening PP&E)
Interest (% of Debt)
Tax Rate (% of Earnings Before Tax)
Accounts Receivable (Days)
Inventory (Days)
Accounts Payable (Days)
Capital Expenditures
Debt Issuance (Repayment)
Equity Issued (Repaid)
Dividend Payout ( as a % of net income)
Dividend distribution tax (as a percentage of dividend)
Income Statement
Expenses
Salaries and Benefits 1,321,350 1,132,900
Rent and Overhead 548,150 506,250
EBITDA 1,279,700 1,864,950
Depreciation & Amortization 975,000 907,500
EBIT 304,700 957,450
Interest 125,000 125,000
Earnings Before Tax 179,700 832,450
Balance Sheet
Liabilities
Accounts Payable 195,100 240,000
Dividends Payable - -
Debt 2,500,000 2,500,000
Total Liabilities 2,695,100 2,740,000
Shareholder's Equity
Equity Capital 3,500,000 3,500,000
Retained Earnings 123,700 713,250
Shareholder's Equity 3,623,700 4,213,250
Total Liabilities & Shareholder's Equity 6,318,800 6,953,250
Assets
Cash 3,398,550 4,060,500
Accounts Receivable 255,000 295,200
Inventory 390,250 480,050
Property & Equipment 2,275,000 2,117,500
Total Assets 6,318,800 6,953,250
Check - -
Supporting Schedules
- - - - - -
(1,000,000) - - - (1,000,000) -
- - - (161,007) (176,903) (198,852)
- - - - - -
(1,000,000) - - (161,007) (1,176,903) (198,852)
8.4%
38.3%
16.2%
9.0%
41%
7.5%
30%
20
70
40
(900,000)
-
-
10%
15%
5.0%
40.0%
19.0%
9%
41.0%
8.0%
30.0%
36
90
25
(900,000)
-
-
10%
15%
15.0%
35.0%
16.0%
9%
41.0%
5.0%
30.0%
15
50
40
(1,100,000)
-
-
10%
15%
8.4%
38.3%
16.2%
9%
41.20%
7.5%
30%
20
70
40
(900,000)
-
-
10%
15%
10,652,375
4,082,479
6,569,895
1,725,685
847,782
3,996,429
887,472
3,108,956
37,500
3,071,456
921,437
2,150,019
447,395
247,252
500,000
1,194,647
3,500,000
10,855,220
14,355,220
15,549,867
12,016,647
583,692
782,941
2,166,587
15,549,867
3,071,456
887,472
71,232
921,437
2,966,259
(900,000)
(900,000)
-
(223,376)
-
(223,376)
1,842,884
10,173,764
12,016,647
583,692
782,941
447,395
919,238
71,232
2,154,059
900,000
887,472
2,166,587
500,000
-
500,000
37,500
8,952,453
2,150,019
215,002
32,250
10,855,220
DCF Model
WACC Calculations
RiskFreeRate 6.60% PreTaxCostofDebt 7.50%
Expected Market Return 12.47% TaxRate 30.00%
EquityRiskPremium 5.87%
Beta 0.47
CostofEquity 9.33% Aftertaxcostofdebt 5.25%
Sensitivity Analysis
Terminal Value Share Price Senstivity
Perpetual Growth
2146 2% 3.0%
7.00%
7.50%
WACC 8.00%
8.50%
9.00%
Revenue COGS
Change INR/Share Change
0.0% 2,146 0.0%
-10.0% -10.0%
+10.0% +10.0%
Revenue
COGS
Discount Rate
EV/EBITDA
Rate of Return
20,000,000 Current Price 1,000
1,500,000 Target Price 2,146
5,553,450 TP Upside 115%
15,946,550 IRR 33%
Perpetual Growth
4.0% 5.0% 6.0%
Discount Rate
INR/Share Change INR/Share
2,146 0.0% 2,146
-10.0%
+10.0%
Revenue
COGS
Discount Rate
EV/EBITDA
2,150,019
2,092,509
12,528
2,105,037
2,210,289
53,242,752
41,377,125
55,299,422
49,973,100
EV/EBITDA
Change INR/Share
0.0% 2,146
-10.0%
+10.0%
Pos Neg
3% -3%
-8% 12%
-11% 11%
72% -50%
80%
Market Data Financial Data Valuation
Price Shares Market Cap Net Debt EV Sales EBITDA Earnings EV/Sales EV/EBITDA P/E
Company Name (INR/share) (Lakhs) (Lakhs) (Lakhs) (Lakhs) (Lakhs) (Lakhs) (Lakhs)
A 9.00 115 1035.00 115.00 1150.00 357.00 86.00 40.00 3.2x 13.4x 25.9x
B 6.00 1,175 7050.00 1900.00 8950.00 5000.00 612.00 400.00 1.8x 14.6x 17.6x
C 21.00 55 1155.00 35.00 1190.00 343.00 86.00 66.00 3.5x 13.8x 17.5x
D 11.00 740 8140.00 360.00 8500.00 2949.00 627.00 300.00 2.9x 13.6x 27.1x
E 9.00 1,400 12600.00 10.00 12610.00 7600.00 694.00 511.00 1.7x 18.2x 24.7x
Median 2.9x 13.8x 24.7x
NIFTY XYZ Ltd.
Date Close Price Change(%) Date Adjusted Close Price Change(%)
6/13/2011 7011 6/13/2011 12
6/20/2011 7061 1% 6/20/2011 11 -9%
6/27/2011 7270 3% 6/27/2011 12 13%
7/4/2011 7322 1% 7/4/2011 12 -1%
7/11/2011 7262 -1% 7/11/2011 13 4%
7/18/2011 7305 1% 7/18/2011 13 0%
7/25/2011 7111 -3% 7/25/2011 13 0%
8/1/2011 6789 -5% 8/1/2011 13 2%
8/8/2011 6630 -2% 8/8/2011 12 -6%
8/15/2011 6311 -5% 8/15/2011 11 -8%
8/22/2011 6192 -2% 8/22/2011 12 8%
8/29/2011 6538 6% 8/29/2011 13 10%
9/5/2011 6582 1% 9/5/2011 15 12%
9/12/2011 6596 0% 9/12/2011 15 3%
9/19/2011 6356 -4% 9/19/2011 18 16%
9/26/2011 6386 0% 9/26/2011 19 10%
10/3/2011 6282 -2% 10/3/2011 19 -3%
10/10/2011 6567 5% 10/10/2011 19 -1%
10/17/2011 6461 -2% 10/17/2011 19 3%
10/24/2011 6782 5% 10/24/2011 19 -3%
10/31/2011 6742 -1% 10/31/2011 18 -3%
11/7/2011 6586 -2% 11/7/2011 15 -16%
11/14/2011 6214 -6% 11/14/2011 13 -15%
11/21/2011 6009 -3% 11/21/2011 13 1%
11/28/2011 6357 6% 11/28/2011 13 1%
12/5/2011 6152 -3% 12/5/2011 13 -6%
12/12/2011 5856 -5% 12/12/2011 12 -6%
12/19/2011 5878 0% 12/19/2011 11 -6%
12/26/2011 5779 -2% 12/26/2011 11 -4%
1/2/2012 5934 3% 1/2/2012 12 9%
1/9/2012 6147 4% 1/9/2012 13 10%
1/16/2012 6344 3% 1/16/2012 12 -3%
1/23/2012 6555 3% 1/23/2012 13 1%
1/30/2012 6717 2% 1/30/2012 14 15%
2/6/2012 6825 2% 2/6/2012 14 -3%
2/13/2012 7077 4% 2/13/2012 15 9%
2/20/2012 6872 -3% 2/20/2012 14 -6%
2/27/2012 6822 -1% 2/27/2012 14 -1%
3/5/2012 6793 0% 3/5/2012 13 -7%
3/12/2012 6776 0% 3/12/2012 13 0%
3/19/2012 6738 -1% 3/19/2012 14 3%
3/26/2012 6760 0% 3/26/2012 13 -3%
4/2/2012 6835 1% 4/2/2012 14 6%
4/9/2012 6690 -2% 4/9/2012 15 6%
4/16/2012 6778 1% 4/16/2012 15 -2%
4/23/2012 6623 -2% 4/23/2012 14 -5%
4/30/2012 6497 -2% 4/30/2012 14 0%
5/7/2012 6301 -3% 5/7/2012 15 6%
5/14/2012 6241 -1% 5/14/2012 18 21%
5/21/2012 6273 1% 5/21/2012 19 4%
5/28/2012 6177 -2% 5/28/2012 20 7%
6/4/2012 6429 4% 6/4/2012 20 0%
6/11/2012 6487 1% 6/11/2012 22 11%
6/18/2012 6514 0% 6/18/2012 21 -3%
6/25/2012 6682 3% 6/25/2012 23 5%
7/2/2012 6767 1% 7/2/2012 23 3%
7/9/2012 6663 -2% 7/9/2012 24 2%
7/16/2012 6629 -1% 7/16/2012 24 0%
7/23/2012 6451 -3% 7/23/2012 23 -4%
7/30/2012 6615 3% 7/30/2012 24 5%
8/6/2012 6707 1% 8/6/2012 25 4%
8/13/2012 6765 1% 8/13/2012 27 9%
8/20/2012 6774 0% 8/20/2012 27 0%
8/27/2012 6616 -2% 8/27/2012 28 4%
9/3/2012 6721 2% 9/3/2012 29 3%
9/10/2012 6961 4% 9/10/2012 33 15%
9/17/2012 7132 2% 9/17/2012 34 1%
9/24/2012 7207 1% 9/24/2012 34 0%
10/1/2012 7279 1% 10/1/2012 33 -1%
10/8/2012 7214 -1% 10/8/2012 34 2%
10/15/2012 7214 0% 10/15/2012 33 -2%
10/22/2012 7168 -1% 10/22/2012 34 2%
10/29/2012 7221 1% 10/29/2012 41 19%
11/5/2012 7218 0% 11/5/2012 35 -15%
11/12/2012 7124 -1% 11/12/2012 38 11%
11/19/2012 7152 0% 11/19/2012 37 -3%
11/26/2012 7472 4% 11/26/2012 38 2%
12/3/2012 7552 1% 12/3/2012 37 -2%
12/10/2012 7512 -1% 12/10/2012 35 -4%
12/17/2012 7492 0% 12/17/2012 35 -1%
12/24/2012 7572 1% 12/24/2012 37 5%
12/31/2012 7743 2% 12/31/2012 37 2%
1/7/2013 7641 -1% 1/7/2013 39 5%
1/14/2013 7743 1% 1/14/2013 41 3%
1/21/2013 7696 -1% 1/21/2013 38 -7%
1/28/2013 7637 -1% 1/28/2013 38 1%
2/4/2013 7479 -2% 2/4/2013 34 -12%
2/11/2013 7416 -1% 2/11/2013 32 -5%
2/18/2013 7385 0% 2/18/2013 31 -3%
2/25/2013 7189 -3% 2/25/2013 29 -4%
3/4/2013 7445 4% 3/4/2013 31 6%
3/11/2013 7347 -1% 3/11/2013 29 -6%
3/18/2013 7032 -4% 3/18/2013 26 -12%
3/25/2013 7085 1% 3/25/2013 27 6%
4/1/2013 6976 -2% 4/1/2013 25 -9%
4/8/2013 6944 0% 4/8/2013 26 3%
4/15/2013 7205 4% 4/15/2013 26 2%
4/22/2013 7299 1% 4/22/2013 27 1%
4/29/2013 7414 2% 4/29/2013 27 3%
5/6/2013 7580 2% 5/6/2013 27 -1%
5/13/2013 7695 2% 5/13/2013 29 6%
5/20/2013 7449 -3% 5/20/2013 29 1%
5/27/2013 7442 0% 5/27/2013 30 3%
6/3/2013 7351 -1% 6/3/2013 32 5%
6/10/2013 7193 -2% 6/10/2013 32 2%
6/17/2013 7036 -2% 6/17/2013 35 9%
6/24/2013 7164 2% 6/24/2013 37 6%
7/1/2013 7209 1% 7/1/2013 36 -3%
7/8/2013 7362 2% 7/8/2013 34 -4%
7/15/2013 7383 0% 7/15/2013 33 -3%
7/22/2013 7181 -3% 7/22/2013 32 -3%
7/29/2013 6880 -4% 7/29/2013 35 7%
8/5/2013 6785 -1% 8/5/2013 34 -3%
8/12/2013 6742 -1% 8/12/2013 35 4%
8/19/2013 6685 -1% 8/19/2013 34 -1%
8/26/2013 6674 0% 8/26/2013 33 -4%
9/2/2013 6908 4% 9/2/2013 33 1%
9/9/2013 7107 3% 9/9/2013 33 -2%
9/16/2013 7281 2% 9/16/2013 37 12%
9/23/2013 7118 -2% 9/23/2013 42 13%
9/30/2013 7210 1% 9/30/2013 41 -2%
10/7/2013 7416 3% 10/7/2013 42 3%
10/14/2013 7505 1% 10/14/2013 41 0%
10/21/2013 7486 0% 10/21/2013 44 7%
10/28/2013 7692 3% 10/28/2013 42 -6%
11/4/2013 7539 -2% 11/4/2013 41 -3%
11/11/2013 7447 -1% 11/11/2013 41 1%
11/18/2013 7388 -1% 11/18/2013 44 7%
11/25/2013 7598 3% 11/25/2013 43 -2%
12/2/2013 7695 1% 12/2/2013 44 1%
12/9/2013 7573 -2% 12/9/2013 45 2%
12/16/2013 7744 2% 12/16/2013 49 10%
12/23/2013 7826 1% 12/23/2013 52 5%
12/30/2013 7733 -1% 12/30/2013 60 16%
1/6/2014 7674 -1% 1/6/2014 55 -8%
1/13/2014 7712 0% 1/13/2014 59 6%
1/20/2014 7702 0% 1/20/2014 59 1%
1/27/2014 7499 -3% 1/27/2014 57 -5%
2/3/2014 7487 0% 2/3/2014 65 15%
2/10/2014 7450 0% 2/10/2014 65 0%
2/17/2014 7579 2% 2/17/2014 62 -5%
2/24/2014 7710 2% 2/24/2014 62 0%
3/3/2014 7995 4% 3/3/2014 65 4%
3/10/2014 7961 0% 3/10/2014 66 3%
3/17/2014 7991 0% 3/17/2014 69 4%
3/24/2014 8256 3% 3/24/2014 72 4%
3/31/2014 8317 1% 3/31/2014 71 -1%
4/7/2014 8441 1% 4/7/2014 71 -1%
4/14/2014 8432 0% 4/14/2014 73 4%
4/21/2014 8456 0% 4/21/2014 75 2%
4/28/2014 8352 -1% 4/28/2014 75 1%
5/5/2014 8531 2% 5/5/2014 84 12%
5/12/2014 8970 5% 5/12/2014 87 4%
5/19/2014 9398 5% 5/19/2014 88 1%
5/26/2014 9206 -2% 5/26/2014 91 3%
6/2/2014 9716 6% 6/2/2014 98 8%
6/9/2014 9606 -1% 6/9/2014 95 -3%
6/16/2014 9583 0% 6/16/2014 94 -1%
6/23/2014 9652 1% 6/23/2014 93 0%
6/30/2014 9988 3% 6/30/2014 98 5%
7/7/2014 9510 -5% 7/7/2014 96 -2%
7/14/2014 9809 3% 7/14/2014 96 0%
7/21/2014 9881 1% 7/21/2014 97 1%
7/28/2014 9703 -2% 7/28/2014 95 -2%
8/4/2014 9638 -1% 8/4/2014 98 4%
8/11/2014 9857 2% 8/11/2014 96 -3%
8/18/2014 10082 2% 8/18/2014 98 3%
8/25/2014 10096 0% 8/25/2014 107 9%
9/1/2014 10321 2% 9/1/2014 108 1%
9/8/2014 10431 1% 9/8/2014 115 6%
9/15/2014 10403 0% 9/15/2014 119 4%
9/22/2014 10145 -2% 9/22/2014 115 -3%
9/29/2014 10146 0% 9/29/2014 127 10%
10/6/2014 10040 -1% 10/6/2014 121 -5%
10/13/2014 9919 -1% 10/13/2014 123 2%
10/20/2014 10255 3% 10/20/2014 122 -1%
10/27/2014 10595 3% 10/27/2014 127 3%
11/3/2014 10651 1% 11/3/2014 128 1%
11/10/2014 10752 1% 11/10/2014 130 2%
11/17/2014 10849 1% 11/17/2014 127 -2%
11/24/2014 10956 1% 11/24/2014 122 -4%
12/1/2014 10990 0% 12/1/2014 130 7%
12/8/2014 10591 -4% 12/8/2014 127 -2%
12/15/2014 10560 0% 12/15/2014 135 6%
12/22/2014 null 12/22/2014 128 -5%
12/29/2014 10663 12/29/2014 148 16%
1/5/2015 10731 1% 1/5/2015 182 23%
1/12/2015 11013 3% 1/12/2015 168 -8%
1/19/2015 11343 3% 1/19/2015 169 1%
1/26/2015 11346 0% 1/26/2015 163 -4%
2/2/2015 11128 -2% 2/2/2015 156 -4%
2/9/2015 11354 2% 2/9/2015 161 3%
2/16/2015 11405 0% 2/16/2015 168 5%
2/23/2015 11405 0% 2/23/2015 174 4%
3/2/2015 11568 1% 3/2/2015 171 -2%
3/9/2015 11246 -3% 3/9/2015 165 -3%
3/16/2015 11140 -1% 3/16/2015 159 -4%
3/23/2015 10843 -3% 3/23/2015 163 2%
3/30/2015 11184 3% 3/30/2015 164 1%
4/6/2015 11475 3% 4/6/2015 179 9%
4/13/2015 11239 -2% 4/13/2015 180 1%
4/20/2015 10813 -4% 4/20/2015 167 -7%
4/27/2015 10697 -1% 4/27/2015 179 7%
5/4/2015 10663 0% 5/4/2015 174 -3%
5/11/2015 10816 1% 5/11/2015 199 14%
5/18/2015 11030 2% 5/18/2015 203 2%
5/25/2015 11024 0% 5/25/2015 210 3%
6/1/2015 10604 -4% 6/1/2015 209 0%
6/8/2015 10410 -2% 6/8/2015 208 -1%
6/15/2015 10739 3% 6/15/2015 222 7%
6/22/2015 10921 2% 6/22/2015 227 2%
6/29/2015 11069 1% 6/29/2015 241 6%
7/6/2015 10959 -1% 7/6/2015 256 6%
7/13/2015 11293 3% 7/13/2015 252 -2%
7/20/2015 11182 -1% 7/20/2015 281 11%
7/27/2015 11233 0% 7/27/2015 278 -1%
8/3/2015 11359 1% 8/3/2015 277 0%
8/10/2015 11236 -1% 8/10/2015 270 -3%
8/17/2015 10991 -2% 8/17/2015 273 1%
8/24/2015 10570 -4% 8/24/2015 259 -5%
8/31/2015 10144 -4% 8/31/2015 245 -6%
9/7/2015 10281 1% 9/7/2015 263 7%
9/14/2015 10491 2% 9/14/2015 263 0%
9/21/2015 10391 -1% 9/21/2015 263 0%
9/28/2015 10514 1% 9/28/2015 264 0%
10/5/2015 10789 3% 10/5/2015 271 3%
10/12/2015 10865 1% 10/12/2015 266 -2%
10/19/2015 10928 1% 10/19/2015 266 0%
10/26/2015 10672 -2% 10/26/2015 257 -3%
11/2/2015 10511 -2% 11/2/2015 250 -3%
11/9/2015 10321 -2% 11/9/2015 242 -3%
11/16/2015 10464 1% 11/16/2015 247 2%
11/23/2015 10574 1% 11/23/2015 247 0%
11/30/2015 10419 -1% 11/30/2015 242 -2%
12/7/2015 10161 -2% 12/7/2015 238 -2%
12/14/2015 10397 2% 12/14/2015 240 1%
12/21/2015 10527 1% 12/21/2015 240 0%
12/28/2015 10634 1% 12/28/2015 251 5%
1/4/2016 10267 -3% 1/4/2016 238 -5%
1/11/2016 9898 -4% 1/11/2016 218 -9%
1/18/2016 9826 -1% 1/18/2016 226 3%
1/25/2016 10014 2% 1/25/2016 231 2%
2/1/2016 9904 -1% 2/1/2016 215 -7%
2/8/2016 9215 -7% 2/8/2016 198 -8%
2/15/2016 9477 3% 2/15/2016 197 -1%
2/22/2016 9240 -3% 2/22/2016 190 -3%
2/29/2016 9851 7% 2/29/2016 204 8%
3/7/2016 9876 0% 3/7/2016 191 -7%
3/14/2016 9973 1% 3/14/2016 186 -3%
3/21/2016 10138 2% 3/21/2016 184 -1%
3/28/2016 10180 0% 3/28/2016 188 2%
4/4/2016 10028 -1% 4/4/2016 233 24%
4/11/2016 10383 4% 4/11/2016 247 6%
4/18/2016 10469 1% 4/18/2016 244 -1%
4/25/2016 10406 -1% 4/25/2016 241 -1%
5/2/2016 10272 -1% 5/2/2016 242 1%
5/9/2016 10400 1% 5/9/2016 253 4%
5/16/2016 10292 -1% 5/16/2016 238 -6%
5/23/2016 10740 4% 5/23/2016 221 -7%
5/30/2016 10817 1% 5/30/2016 216 -2%
6/6/2016 10802 0% 6/6/2016 229 6%
6/13/2016 10806 0% 6/13/2016 244 7%
6/20/2016 10707 -1% 6/20/2016 243 -1%
6/27/2016 11106 4% 6/27/2016 245 1%
7/4/2016 11122 0% 7/4/2016 239 -2%
7/11/2016 11362 2% 7/11/2016 239 0%
7/18/2016 11420 1% 7/18/2016 237 -1%
7/25/2016 11586 1% 7/25/2016 242 2%
8/1/2016 11628 0% 8/1/2016 235 -3%
8/8/2016 11513 -1% 8/8/2016 230 -2%
8/15/2016 11681 1% 8/15/2016 229 0%
8/22/2016 11592 -1% 8/22/2016 227 -1%
8/29/2016 11851 2% 8/29/2016 222 -2%
9/5/2016 11973 1% 9/5/2016 214 -4%
9/12/2016 11841 -1% 9/12/2016 209 -2%
9/19/2016 11948 1% 9/19/2016 231 10%
9/26/2016 11701 -2% 9/26/2016 220 -4%
10/3/2016 11908 2% 10/3/2016 221 0%
10/10/2016 11775 -1% 10/10/2016 221 0%
10/17/2016 11930 1% 10/17/2016 214 -3%
10/24/2016 11853 -1% 10/24/2016 211 -1%
10/31/2016 11505 -3% 10/31/2016 203 -4%
11/7/2016 11270 -2% 11/7/2016 198 -2%
11/14/2016 10921 -3% 11/14/2016 202 2%
11/21/2016 11005 1% 11/21/2016 205 1%
11/28/2016 10989 0% 11/28/2016 208 2%
12/5/2016 11228 2% 12/5/2016 202 -3%
12/12/2016 11032 -2% 12/12/2016 198 -2%
12/19/2016 10781 -2% 12/19/2016 198 0%
12/26/2016 11036 2% 12/26/2016 199 1%
1/2/2017 11200 1% 1/2/2017 199 0%
1/9/2017 11423 2% 1/9/2017 206 3%
1/16/2017 11389 0% 1/16/2017 207 1%
1/23/2017 11783 3% 1/23/2017 217 4%
1/30/2017 11959 1% 1/30/2017 217 0%
2/6/2017 12054 1% 2/6/2017 218 0%
2/13/2017 12068 0% 2/13/2017 211 -3%
2/20/2017 12213 1% 2/20/2017 208 -1%
2/27/2017 12157 0% 2/27/2017 218 5%
3/6/2017 12176 0% 3/6/2017 220 1%
3/13/2017 12525 3% 3/13/2017 230 5%
3/20/2017 12485 0% 3/20/2017 232 1%
3/27/2017 12632 1% 3/27/2017 247 7%
4/3/2017 12712 1% 4/3/2017 244 -1%
4/10/2017 12711 0% 4/10/2017 245 0%
4/17/2017 12729 0% 4/17/2017 243 -1%
4/24/2017 12979 2% 4/24/2017 245 1%
5/1/2017 12946 0% 5/1/2017 242 -1%
5/8/2017 13113 1% 5/8/2017 238 -2%
5/15/2017 13051 0% 5/15/2017 227 -5%
5/22/2017 13165 1% 5/22/2017 235 4%
5/29/2017 13290 1% 5/29/2017 234 0%
6/5/2017 13355 0% 6/5/2017 243 4%
6/12/2017 13288 -1% 6/12/2017 240 -1%
6/19/2017 13208 -1% 6/19/2017 244 2%
6/26/2017 13178 0% 6/26/2017 238 -2%
7/3/2017 13409 2% 7/3/2017 255 7%
7/10/2017 13661 2% 7/10/2017 253 -1%
7/17/2017 13704 0% 7/17/2017 241 -5%
7/24/2017 13829 1% 7/24/2017 237 -2%
7/31/2017 13880 0% 7/31/2017 226 -5%
8/7/2017 13336 -4% 8/7/2017 241 6%
8/14/2017 13596 2% 8/14/2017 243 1%
8/21/2017 13617 0% 8/21/2017 247 2%
8/28/2017 13858 2% 8/28/2017 252 2%
9/4/2017 13849 0% 9/4/2017 251 0%
9/11/2017 14078 2% 9/11/2017 263 5%
9/18/2017 13835 -2% 9/18/2017 249 -5%
9/25/2017 13611 -2% 9/25/2017 261 5%
10/2/2017 13910 2% 10/2/2017 258 -1%
10/9/2017 14147 2% 10/9/2017 257 0%
10/16/2017 14155 0% 10/16/2017 262 2%
10/23/2017 14405 2% 10/23/2017 264 1%
10/30/2017 14658 2% 10/30/2017 295 12%
11/6/2017 14485 -1% 11/6/2017 284 -4%
11/13/2017 14454 0% 11/13/2017 287 1%
11/20/2017 14629 1% 11/20/2017 298 4%
11/27/2017 14338 -2% 11/27/2017 300 1%
12/4/2017 14536 1% 12/4/2017 316 5%
12/11/2017 14586 0% 12/11/2017 343 8%
12/18/2017 14908 2% 12/18/2017 341 0%
12/25/2017 15003 1% 12/25/2017 337 -1%
1/1/2018 15138 1% 1/1/2018 338 0%
1/8/2018 15284 1% 1/8/2018 337 0%
1/15/2018 15379 1% 1/15/2018 317 -6%
1/22/2018 15514 1% 1/22/2018 311 -2%
1/29/2018 14886 -4% 1/29/2018 304 -2%
2/5/2018 14650 -2% 2/5/2018 305 0%
2/12/2018 14615 0% 2/12/2018 297 -2%
2/19/2018 14640 0% 2/19/2018 303 2%
2/26/2018 14611 0% 2/26/2018 306 1%
3/5/2018 14234 -3% 3/5/2018 304 -1%
3/12/2018 14277 0% 3/12/2018 314 3%
3/19/2018 13937 -2% 3/19/2018 305 -3%
3/26/2018 14126 1% 3/26/2018 319 5%
4/2/2018 14526 3% 4/2/2018 348 9%
4/9/2018 14684 1% 4/9/2018 348 0%
4/16/2018 14818 1% 4/16/2018 336 -3%
4/23/2018 14961 1% 4/23/2018 348 4%
4/30/2018 14804 -1% 4/30/2018 339 -3%
5/7/2018 14928 1% 5/7/2018 341 0%
5/14/2018 14604 -2% 5/14/2018 351 3%
5/21/2018 14620 0% 5/21/2018 335 -5%
5/28/2018 14674 0% 5/28/2018 356 6%
6/4/2018 14769 1% 6/4/2018 346 -3%
6/11/2018 14813 0% 6/11/2018 341 -1%
6/18/2018 14743 0% 6/18/2018 358 5%
6/25/2018 14529 -1% 6/25/2018 342 -5%
7/2/2018 14588 0% 7/2/2018 350 2%
7/9/2018 14827 2% 7/9/2018 375 7%
7/16/2018 14735 -1% 7/16/2018 382 2%
7/23/2018 15201 3% 7/23/2018 405 6%
7/30/2018 15361 1% 7/30/2018 406 0%
8/6/2018 15423 0% 8/6/2018 416 2%
8/13/2018 15495 0% 8/13/2018 421 1%
8/20/2018 15629 1% 8/20/2018 423 0%
8/27/2018 15846 1% 8/27/2018 420 -1%
9/3/2018 15660 -1% 9/3/2018 420 0%
9/10/2018 15528 -1% 9/10/2018 423 1%
9/17/2018 14945 -4% 9/17/2018 413 -3%
9/24/2018 14446 -3% 9/24/2018 365 -12%
10/1/2018 13690 -5% 10/1/2018 353 -3%
10/8/2018 13906 2% 10/8/2018 338 -4%
10/15/2018 13705 -1% 10/15/2018 357 6%
10/22/2018 13353 -3% 10/22/2018 370 3%
10/29/2018 14113 6% 10/29/2018 395 7%
11/5/2018 14185 1% 11/5/2018 394 0%
11/12/2018 14250 0% 11/12/2018 397 1%
11/19/2018 14079 -1% 11/19/2018 381 -4%
11/26/2018 14429 2% 11/26/2018 375 -2%
12/3/2018 14171 -2% 12/3/2018 372 -1%
12/10/2018 14412 2% 12/10/2018 362 -3%
12/17/2018 14401 0% 12/17/2018 362 0%
12/24/2018 14516 1% 12/24/2018 365 1%
12/31/2018 14355 -1% 12/31/2018 374 2%
1/7/2019 14423 0% 1/7/2019 378 1%
1/14/2019 14489 0% 1/14/2019 374 -1%
1/21/2019 14261 -2% 1/21/2019 360 -4%
1/28/2019 14362 1% 1/28/2019 373 4%
2/4/2019 14324 0% 2/4/2019 373 0%
2/11/2019 13994 -2% 2/11/2019 370 -1%
2/18/2019 14137 1% 2/18/2019 365 -1%
2/25/2019 14319 1% 2/25/2019 370 1%
3/4/2019 14592 2% 3/4/2019 376 2%
3/11/2019 15045 3% 3/11/2019 375 0%
3/18/2019 15051 0% 3/18/2019 375 0%
3/25/2019 15305 2% 3/25/2019 385 2%
4/1/2019 15347 0% 4/1/2019 422 10%
4/8/2019 15325 0% 4/8/2019 424 1%
4/15/2019 15422 1% 4/15/2019 452 7%
4/22/2019 15339 -1% 4/22/2019 441 -2%
4/29/2019 15232 -1% 4/29/2019 439 0%
5/6/2019 14699 -3% 5/6/2019 433 -1%
5/13/2019 14767 0% 5/13/2019 400 -8%
5/20/2019 15392 4% 5/20/2019 407 2%
5/27/2019 15518 1% 5/27/2019 421 3%
6/3/2019 15413 -1% 6/3/2019 423 1%
6/10/2019 15305 -1% 6/10/2019 412 -3%
6/17/2019 15172 -1% 6/17/2019 416 1%
6/24/2019 15292 1% 6/24/2019 433 4%
7/1/2019 15292 0% 7/1/2019 442 2%
7/8/2019 14972 -2% 7/8/2019 423 -4%
7/15/2019 14736 -2% 7/15/2019 421 0%
7/22/2019 14554 -1% 7/22/2019 408 -3%
7/29/2019 14165 -3% 7/29/2019 428 5%
8/5/2019 14334 1% 8/5/2019 429 0%
8/12/2019 14235 -1% 8/12/2019 426 -1%
8/19/2019 13933 -2% 8/19/2019 422 -1%
8/26/2019 14234 2% 8/26/2019 458 9%
9/2/2019 14137 -1% 9/2/2019 483 5%
9/9/2019 14351 2% 9/9/2019 484 0%
9/16/2019 14038 -2% 9/16/2019 481 -1%
XYZ Ltd. Beta BSE 500 return
9 Year Beta 0.725 Year Close Price
5 Year Beta 0.706 2011-12 6760
3 year Beta 0.513 2012-13 7085
2013-14 8317
Pure-Play Method 2014-15 11184
XYZ Ltd. 2015-16 10180
D/E 0.4 2016-17 12632
Tax Rate 30% 2017-18 14126
Beta Asset (unlevered) 0.40 2018-19 15305
ABC Ltd. Expected Market Return
Debt 1500000
Equity 6602700
D/E 0.23
Tax Rate 29%
Beta Equity (ABC Ltd.) 0.47
30%
20%
10%
11%
16%
14%
8%
12%
Comps
Metric Comps EV Net Debt Equity Value Shares Share Price Key Assumptions - Valuation Co. Inc.
EV/Sales 2.9x 20,513,708 (4,053,450) 24,567,158 20,000 1,228 Current Price 1,000 Sales
EV/EBITDA 13.8x 38,512,413 (4,053,450) 42,565,863 20,000 2,128 Shares 20,000 EBITDA
P/E 24.7x 28,881,618 (4,053,450) 32,935,068 20,000 1,647 Debt 1,500,000 EBIT
Cash 5,553,450 Earnings
Lo 1,228
Hi 2,128
Precedents
Metric Precedents EV Net Debt Equity Value Shares Share Price Football Field Data
EV/Sales 2.6x 18,300,986 (4,053,450) 22,354,436 20,000 1,118 lo (bar) lo (label)
EV/EBITDA 9.0x 25,049,250 (4,053,450) 29,102,700 20,000 1,455 Comps 1,228.36 1,228.36
EV/EBIT 10.2x 19,916,655 (4,053,450) 23,970,105 20,000 1,199 Precedents 1,117.72 1,117.72
DCF - base 1,113.00 1,113.00
Lo 1,118 DCF - Bull 1,831.00 1,831.00
Hi 1,455 52 wk hi/lo 1,000.00 1,000.00
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
-
Comps Precedents DCF - base DCF - Bull 52 wk hi/lo
7,117,050
2,783,250
1,956,100
1,335,700
hi (bar) hi (label)
2,128.29 2,128.29
1,455.14 1,455.14
3,868.00 3,868.00
5,932.00 5,932.00
4,500.00 4,500.00
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Copy Raw Data into Main Model (alt from the pdf and then ctrl + alt + v -> values)
View - Remove Gridlines
Titles and Years Editing ( Black Background + Whilte Font, Historical data in center across selection, Financial Statement He
Currency)
Put formulas into historical data
Income Statements
Gross Profit - Revenue - COGS ( Sub total in Single Top Border)
EBITDA= Gross Profit - (Sum of all operating expenses) (Sub Total in Single Top Border)
EBIT= EBITDA - Depreciation (Sub Total in Single Top Border)
EBT - EBIT - interest (Sub Total in Single Top Border)
Net Income = EBT - taxes (Main Total in Single Top and Double bottom border)
Balance Sheet
Total Asset = sum of all asset (Main Total in Single Top and Doible bottom border)
Total Liabilities = sum of all liabilities (Sub Total in Single Top Border)
Total Shareholder Equity = share capital + retained earnings (Sub Total in Single Top Border)
Total Shareholder Equity + Liability (Main Total in Single Top and Doible bottom border)
Balance Sheet Check
Cash Flows
CFO Total (start with PBT)
Cfi Total (Negative figures in brakcet format portraying outflows)
CFF Total (Inflow as + and Outflow as bracket format negative)
Cash Check
Supporting Schedule
Working Capital
Connect Trade receivable, Inventories, Trade Payables from balance sheet into the schedule
Calculate working capital as TR + Inventories - Payables
And then calculate working capital chnages as current WC - last year WC
Depreciation Schedule
Connect Capex from cash flow as - cell link, as we want all the numbers to be postive in the schedule
Connect Depreciation number from the cash flow statement
Apply Formula Opening + Capex - Depreciation to find closing
Now use Goal seek function to find opening gross ssets (Set cell = closing PPE cell of schedule, value from balance sheet, ch
cell link opening gross asset)
Connect Closing gross PPE with next year Opening PPE and Ctrl + r to fill further
Asset Check: Balance sheet clsoing asset and Depreciation closing assets should be same
Debt Schedule
1. Connect issuance/repayment from CFF cell
2. Calculate closing balance as opening + Issuance/repayment cell
3. Find Opening of first year through goal seek function (set cell: clsoing debt, value: from balance sheet, change cell: open
Debt)
4. Connect next years opening debt with this year closing debt cell
5. Use Ctrl + r to fill the schedule
6. Connect interest from P&L statement to the schedule
7. Debt check
Forecast Assumptions
NOTE: EBIT, EBT and Net income will be calculated automatically as they are formulas even if deprication and interest ex
and tax has not been plugged in, When we plug in respective data EBIT, EBT, taxes, and Net income figure will be readju
automatically
Debt Schedule
a) connect last year closing and upcoming years opening cell and fill the remaining years through ctrl + r
b) calculate issuance/repayment by connecting with the assumption figures as "=forecasted issuance/repayment"
c) calculate closing debt as opening + issuance/repayment and fill the remaining the remaining years through ctrl + r
d) calculate interest expense as "=average(opening debt:closing debt)*assumed interest rate"
e) connect interest amount to P&L and closing debt with balance sheet
Calculate share capital values directly in balance sheet as opening share capital + assumption sheet issuance/buyback
Calculate total of shareholders equity through ctrl + r
total of liabilities + shareholders equity through ctrl + r
Note: We will only be missing cash figures in balance sheet that we will be plugging from cash flow statement
DCF valuations, comp, precedent and Valuation - Summary Football Field Chart
STEP 1: Beta (PurePlay method) and Market Return
Note: After finding a peer company from listed space. Follow the below steps:
1. Put weekly closing data for index (BSE - Market - indices - historical data - select range - download)
2. Put weekly closing data for stock (BSE - Market - equity - historical data of shares - select range - download)
3. Delete High, low values from downloaded data. Only keep closing prices.
4. Calculate weekly index return and stock return as = new/old - 1
5. use =slope(stock return series, index return series to calculate Beta
6. Calculate 9 year, 5 year, 3 year Beta
7. Find D/E ratio and Tax rate of listed peer company
8. Calculate unlevered Beta of peer through Beta levered/1+(1-t)*DER
9. Find D/E latest of our company and tax rate
9. Calculate Levered Beta of our company as Beta unlevered*(1+(1-t)*DER)
10. Create scatter plot Chart of Beta and edit it completely.
10. Calculating market return, from weekly data we will find yearly closing through vlookup function
11. formula as "=vlookup(dateselect,date and closing value column,2,0)
12. Calculate rolling 5 year CAGR
13. Calculate expected market return as median of rolling returns
STEP 2:
A) Now prepare in valuation sheet template of WACC
B) Name all the cells in the WACC template (Formluma -> selection from range, left option)
C) Connect value of market return, beta to valuation sheet respective cells from Beta-Market return sheet
1. Connect forecasted Tax rate and forecasted cost of debt from assumption sheet to the WACC table
2. Calculate weight of debt and weights of equity depending on our median values of target D/E calculations
3. Calculate WACC
4. Fill in the additional details on the right hand side
5. Calculate ROE, SSGR and perpetual growth rate. Apply if function in perpetual growth rate as it cannot be higher than G
growth rate of the country (for majorily domestic focuseed company)
6. Calculate Exit Multiple of P/E through Relative Valuation Sheet
7. First create a new sheet called relative valuation and then create the template of Peer group, precedent deals and Histo
index multiple data
8. For historical index multiple data (go to BSE Indicies -> Indices histroical data -> Index prices and ratios -> data sort -> cre
charts
9. Go to the DCF Valuations sheet and in EXIT P/E multiple approach do "=median(p/e data column)
9. Now Punch in the data of Price, Shares, Net Debt, Financials of peer group and precedent deals values
10. Calculate Peer group multiple valuations data
11. Calcuate valuation multiples of precedent deals using iferror function as =iferror(
2. Enter Date row and yearfraction function. Connect date from transactional date reported besides WACC calculations.
3. First create the template of FCFF (EBIT + Depreciation=EBITDA, Less:Operating taxes, Less: NWC ->Cash flow from opera
(cash flow from investing -> Less: investment in PP&E, Add: Sale of PP&E) (FCFF=Net cash from operating + cash flow from
investing)
4. After calculating FCFF multiply it with yearfrac to get transactional FCFF
5. Keep IRR FCFF blank for time being
6. Now create Intrinsic Value Template
7. Now forecast terminal value. (First create termianal value template)
8. Calculate adjusted FCFF by adding back growth capex of the company
9. Name cells such as perpetual growth rate, P/E. EV/EBITDA etc.
9. calculate terminal value FCFF as FCFF last year*(1+perptual growth rate)
10. Then calculate three terminal values (gordon growth, P/E, EV/EBITDA) and take and average of it
11. Calculate enterprise value through XNPX function (put xero in initial cells before the values of transaction FCFF and FCF
begins)
12. Put formula as" =XNPV(WACC,range of transactional FCFF,range of dates)
13. Connect cash and debt from last historical values and calculate equity value ans EV-Debt+Cash and then divide by outs
share value to get intrinsic value
14. Now fill the next table besides intrinsic value data, mcap as CMP*outstanding shares and current debt and current cas
connect from intrinsic value table. Calculate current enterprise value and then connect with IRR row first cell as "-current
enterprise value"
15. Now calculate target upside and irr. Calculate irr as"=xirr(range of IRR FCFF, range of dates)
4. Now for discount rate we will connect it at Intrinsic value section enterprise value formula and exit multiple perpetual v
formula. To find whihc all cells are directly influenced by WACC, go to wacc cell and press in formulas tab ->trace depende
EV/EBITDA we will go to EV/EBITDA cell in details section of WACC template and press trace dependents and connect 0% c
there.
5. Link share price cell corresponding to 0% cell with the answer of intrinsic value data table. (Do it for every head revenue
discount rate, EV/EBITDA)
5. Now perform one way data table analysis through what if function on every dataset. For example first select entire data
under revenue tab from 0% to +10% and corresponding share price cells and in data table analysis insert column cell as ce
containing 0% value.
6. Prepare Automatic Gravity Sort table to be used to create Tornado Chart
Automatic Gravity Sort Table - Automatically sorts Highest to lowest Impact in terms of assumptions impact on share pr
We will calculate -10% changes and +10% changes for every head as "new/old-1"
Now insert values of ranks 1,2,3,4
before we find whihc has the biggest impact we need to convert everything into absolute values using abs function
Now, we will sort the impact from smallest to biggest (in the output section) using small function through "=small(range of
absolute value with dollar sign, first rank cell) and then ctrl + d
Now, in Driver section we will link the rearranged values with their respective particulars (as currently in output section wi
number 4% is corresponsing to revenue whereas it is impact of change in EV/EBITDA
We do it through index and match function as"=index(with dollar sings entire data table till output, match(first cell of outp
entuire output column with $ sign,0), match (revenue name cell with dollar sign, entire row from revenue till abs column w
sign,0))
Then press ctrl + d
So this has helped us to list down drivers of share prices with lowest impact variable to highest impact variable
Now, we will figure out the positive and negative impact of various drivers (re-arranged). Although we haev calculated it e
itself.
Apply =vlookup(select driver,
Base Case
Revenue Growth (% Change) 8.4%
Cost of Goods Sold (% of Net Revenue) 38.3%
Salaries and Benefits (% of Net Revenue) 16.2%
Rent and Overhead (Y-O-Y Change) 9.0%
Depreciation & Amortization (% of opening PP&E) 41%
Interest (% of Debt) 7.5%
Tax Rate (% of Earnings Before Tax) 30%
Accounts Receivable (Days) 20
Inventory (Days) 70
Accounts Payable (Days) 40
Capital Expenditures (900,000)
Debt Issuance (Repayment) -
Equity Issued (Repaid) -
Dividend Payout ( as a % of net income) 10%
Dividend distribution tax (as a percentage of dividend) 15%
Bear Case
Revenue Growth (% Change) 5.0%
Cost of Goods Sold (% of Net Revenue) 40.0%
Salaries and Benefits (% of Net Revenue) 19.0%
Rent and Overhead (Y-O-Y Change) 9%
Depreciation & Amortization (% of opening PP&E) 41.0%
Interest (% of Debt) 8.0%
Tax Rate (% of Earnings Before Tax) 30.0%
Accounts Receivable (Days) 36
Inventory (Days) 90
Accounts Payable (Days) 25
Capital Expenditures (900,000)
Debt Issuance (Repayment) -
Equity Issued (Repaid) -
Dividend Payout ( as a % of net income) 10%
Dividend distribution tax (as a percentage of dividend) 15%
Bull Case
Revenue Growth (% Change) 15.0%
Cost of Goods Sold (% of Net Revenue) 35.0%
Salaries and Benefits (% of Net Revenue) 16.0%
Rent and Overhead (Y-O-Y Change) 9%
Depreciation & Amortization (% of opening PP&E) 41.0%
Interest (% of Debt) 5.0%
Tax Rate (% of Earnings Before Tax) 30.0%
Accounts Receivable (Days) 15
Inventory (Days) 50
Accounts Payable (Days) 40
Capital Expenditures (900,000)
Debt Issuance (Repayment) -
Equity Issued (Repaid) -
Dividend Payout ( as a % of net income) 10%
Dividend distribution tax (as a percentage of dividend) 15%
2021 2022 2023 2024
Cases
8.4% 8.4% 8.4% 8.4% 1
38.3% 38.3% 38.3% 38.3% 2
16.2% 16.2% 16.2% 16.2% 3
9.0% 9.0% 9.0% 9.0%
41% 41% 41% 41%
7.5% 7.5% 7.5% 7.5%
30% 30% 30% 30%
20 20 20 20
70 70 70 70
40 40 40 40
(900,000) (900,000) (900,000) (900,000)
- (1,000,000) - -
- - - -
10% 10% 10% 10%
15% 15% 15% 15%