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Year
Sales
EBITDA
Tax
Investment:
Stock change
Debtors change
Creditors change
Fixed Assets: Enhancing
Fixed Assets: Sustaining
Other
Free Cash Flow

Base year
286,334
550

2009
1
1,500,000
-300,000
0

2010
2
1,950,000
195,000
-68,250

2011
3
2,535,000
380,250
-133,088

2012
4
3,042,000
608,400
-212,940

5
3,650,400
1,825,200
-638,820

6
4,380,480
0
0

7
4,599,504
459,950
-160,983

8
4,829,479
724,422
-253,548

9
5,070,953
760,643
-266,225

10
5,324,501
798,675
-279,536

Terminal year
3,133,260
469,989
-164,496

0
0
0
-337,500
-75,000
0

0
0
0
-292,500
-97,500
0

0
0
0
-126,750
-126,750
0

0
0
0
-121,680
-152,100
0

0
0
0
-146,016
-182,520
0

0
0
0
-43,805
-219,024
0

0
0
0
-45,995
-229,975
0

0
0
0
-48,295
-241,474
0

0
0
0
-50,710
-253,548
0

0
0
0
-50,710
-266,225
0

0
0
0
0
-156,663
0

-712,500

-263,250

-6,338

121,680

857,844

-262,829

22,998

181,105

190,161

202,204

Terminal adjustment

148,830
1,814,998

Discount Factor

0.8993

0.8087

0.7273

0.6540

0.5881

0.5289

0.4756

0.4277

0.3846

0.3459

0.6540

Discounted flow

-640,737

-212,892

-4,609

79,579

504,527

-139,009

10,938

77,463

73,144

69,943

1,187,017

408,358
601,813
188,672
821,499

2000
5
20%

2001
6
20%

2002
7
5%

2003
8
5%

2004
9
5%

2005
10
5%

Terminal

0.15

0.15

0.35

0.35

Total Enterprise Value


Add cash and near cash assets
Less debt
Shareholder value
No of shares
Estimated share price

1,000,000
0.82

Value Drivers
Year
Sales growth rate

2009
1
424%

1997
2
30%

1998
3
30%

1999
4
20%

Operating EBITDA margin

-20%

10%

15%

20%

0.35

0.35

0.35

NA

NA
0.5

NA
Income tax rate

NA
0.35

NA
Stock change
(% of sales growth)
Debtors changes
(% of sales growth)
Trade creditor changes
(-% of sales growth)
Capital equip investment
(enhancing: % of sales growth)
Capital equip investment
(sustaining: % of sales)
Cost of Capital

0.75

0.5

0.25

0.2

0.05

0.05

0.05

0.05

0.132

0.132

0.132

0.132

NA

NA

NA

NA
0.05

NA

NA
0.132

NA

NA

NA

NA

NA

StrategyExpert.com

NA

0.05

0.05

0.132

0.132

NA
0.132

NA

0.2
NA

0.05

0.132
NA

NA
0.2

0.05

0.132
NA

NA
0

0.2

0.05

0.132
NA

NA

NA

NA

NA
0

0.2

0.05

NA

NA

NA
0.2

NA
0

NA
0.35

NA

NA

NA

NA

NA

0.2
NA

3%

NA
0.15

0.35
NA

NA

NA

NA

NA

NA
0.15

0.35
NA

0
NA

NA
0.1

0.35
NA

NA

NA
0

NA

Value growth duration

4 years

Value Drivers
Sales growth rate

2009
1
424%

2010
2
30%

2011
3
30%

2012
4
20%

Operating EBITDA margin

-20%

10%

15%

20%

Income tax rate

0%

35%

35%

35%

Stock change
(% of sales growth)
Debtors changes
(% of sales growth)
Trade creditor changes
(-% of sales growth)
Capital equip investment
(enhancing: % of sales growth)
Capital equip investment
(sustaining: % of sales)
Cost of Capital

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

75%

50%

25%

20%

5%

5%

5%

5%

11.2%

11%

11%

11%

Year

Value growth duration


Risk free rate
Market premium
Beta
Return on debt
Return on equity

4 years
0.05
0.08
1.3
0.07
0.154

2013
5
20%
NA
50%
NA
35%
NA
0%
NA
0%
NA
0%
NA
20%
NA
5%
NA
11%
NA

(not less than 4)


Debt
200,000
Equity
200,000
Debt + Equity
400,000
0.8

0.5
0.5
1

2014
6
20%
NA
0%
NA
35%
NA
0%
NA
0%
NA
0%
NA
20%
NA
5%
NA
11%
NA

2015
7
5%
NA
10%
NA
35%
NA
0%
NA
0%
NA
0%
NA
20%
NA
5%
NA
11%
NA

2016
8
5%
NA
15%
NA
35%
NA
0%
NA
0%
NA
0%
NA
20%
NA
5%
NA
11%
NA

2017
9
5%
NA
15%
NA
35%
NA
0%
NA
0%
NA
0%
NA
20%
NA
5%
NA
11%
NA

2018
10 Terminal
5%
3%
NA
15%
15%
NA
35%
35%
NA
0%
0%
NA
0%
0%
NA
0%
0%
NA
20%
0%
NA
5%
5%
NA
11%
11%
NA

After year
Terminal sales

Terminal discount rate

3
2611050

4
3133260

5
6
7
8
3759912 4511894.4 4737489.1 4974363.6

4
5
6
0.6540047 0.5881337 0.5288972

7
8
9
0.475627 0.4277221 0.3846422

9
10
5223081.8 5484235.8
10
0.3459012