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DCF Model

Table of Contents
DCF Model

Notes
This Excel model is for educational purposes only and should not be used for any other reason.
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DCF Model

Assumptions This chart isn't available i


Tax Rate 25% Cash Flow
Discount Rate 12% $50,000 $47,008 Editing this shape or savi
$45,000 $41,501
$43,510 different file format will p
Perpetural Growth Rate 3%
$40,000 $37,715 chart.
EV/EBITDA Mulltiple 7.0x
$35,000
Transaction Date 12/31/2017 $30,000
Fiscal Year End 6/30/2018 $25,000
$20,000 $17,747
Current Price 25.00
$15,000
Shares Outstanding 20,000 $10,000
Debt 30,000 $5,000
$0
Cash 239,550 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022
Capex 15,000

Discounted Cash Flow Entry 2018 2019 2020 2021 2022 Exit
Date 12/31/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2022
Time Periods 0 1 2 3 4
Year Fraction 0.50 1.00 1.00 1.00 1.00
EBIT 47,814 51,095 55,861 58,693 63,039
Less: Cash Taxes 11,954 12,774 13,965 14,673 15,760
Plus: D&A 15,008 15,005 15,003 15,002 15,001
Less: Capex 15,000 15,000 15,000 15,000 15,000
Less: Changes in NWC 375 611 398 511 272
Unlevered FCF 35,494 37,715 41,501 43,510 47,008
(Entry)/Exit (290,450) 542,129
Transaction CF (290,450) 17,747 37,715 41,501 43,510 47,008 542,129

Intrinsic Value Market Value


Enterprise Value 489,747 Market Cap 500,000
Plus: Cash 239,550 Plus: Debt 30,000
Less: Debt 30,000 Less: Cash 239,550
Equity Value 699,297 Enterprise Value 290,450

Equity Value/Share 34.96 Equity Value/Share 25.00

Instructions
Step 1: Get EBIT and D&A from the income statement This file is for ed
Step 2: Calculate the net working capital
There are two ways to find NWC:
1. NWC = Current Assets (less cash) - Current Liabilities (less debt)
2. NWC = Accounts Receivable + Inventory - Accounts Payable
This chart isn't available in your version of Excel.

Editing this shape or saving this workbook into a


different file format will permanently break the
chart.

Terminal Value
Perpetural Growth 537,981
EV/EBITDA 546,278
Average 542,129

Rate of Return
Target Price Upside 40%
Internal Rate of Return (IRR) 26%

Market Value vs Intrinsic Value


Market Value 25.00
Upside 9.96
Intrinsic Value 34.96

This file is for educational purposes only. E&OE

Corporate Finance Institute®


https://corporatefinanceinstitute.com/