SIMPLE DISCOUNTED CASH FLOW MODEL & RELATIVE VALUATION

Company Information: Input in Yellow Cells

Company Name: Acushnet
Company Ticker: GOLF => Go to finance.yahoo.com and type a company name and the ticker will pull up
Share Price on Valuation Date: $24.91) => Use the Stock Price, that is below the company name
Diluted Shares Outstanding $74,760,000.00 => Click on "Key Statistics" and under the "Share Statistics" Column use the "Shares Outstanding" number, in millions

Discounted Cash Flows (DCF) Analysis

Go to finance.yahoo.com
Most Recent Revenue $1,640,000,000.00 => On "Key Statistics" page enter "Revenue (ttm)",ttm means trailing-twelve-months, in millions
Most Recent Net Income $100,120,000.00 => On "Key Statistics" page enter "Net Income avl to Common (ttm)', in millions
Most Recent Free Cash Flow $104,530,000.00 => On "Key Statistics" page enter "Levered Free Cash Flow (ttm)", in millions
Key Assumptions: => Play Around with different assumptions of growth rates (check out how it changes the Intrinsic Value and the Cash Flow Chart)
Growth rate for next 5 Years 15% => How fast you expect the company's earnings to grow on average each year for the next 5 years
Terminal Growth Rate 5% => How fast you expect the company's earnings to grow after 5 years to perpetuity
Discount Rate 10% => In most cases this is 10-12%, and represents the company's cost of capital. In most cases just leave this constant.
1) 2) 3) 4) 5) 6) 7) 30) 8)
Projected Annual Forecast
Period Actual Future Yr 1 Future Yr 2 Future Yr 3 Future Yr 4 Future Yr 5 Future Yr 6 Future Yr 7 => Terminal Value
Revenue $1,640,000,000.0)$1,886,000,000.0)$2,168,900,000.0)$2,494,235,000.0)$2,868,370,250.0)$3,298,625,787.5)$3,463,557,076.9)$3,636,734,930.7) $3,818,571,677.3)
Revenue Growth Rate (%) 15.0%) 15.0%) 15.0%) 15.0%) 15.0%) 5.0%) 5.0%) 5.0%)
Net Income $100,120,000.0) $115,138,000.0) $132,408,700.0) $152,270,005.0) $175,110,505.8) $201,377,081.6) $211,445,935.7) $222,018,232.5) $233,119,144.1)
Net Margin (%) 6.1% 6.1%) 6.1%) 6.1%) 6.1%) 6.1%) 6.1%) 6.1%) 6.1%) => % of Profits per Revenue. Can the company keep their margins over time?
Cash Flow 104,530,000.0) $120,209,500.0) $138,240,925.0) $158,977,063.8) $182,823,623.3) $210,247,166.8) $220,759,525.1) $231,797,501.4) $243,387,376.5)
Cash Flow Margin (%) 6.4% 6.4%) 6.4%) 6.4%) 6.4%) 6.4%) 6.4%) 6.4%) 6.4%) => % of Cash earned for every dollar of Revenue

Unlevered Cash Flows

$104,530,000.0) $120,209,500.0) $138,240,925.0) $158,977,063.8) $182,823,623.3) $210,247,166.8) $220,759,525.1) $231,797,501.4) $4,867,747,530) => Sum of all future cash flows after Yr 7
Discount Rate 10.0%) 10.0%) 10.0%) 10.0%) 10.0%) 10.0%) 10.0%) 10.0%) => Discounted back to present value at a discount rate, Cash today is worth more than cash tomorrow
Discounted Cash Flows $109,281,363.6) $114,248,698.3) $119,441,821.0) $124,870,994.7) $130,546,949.0) $124,612,996.8) $118,948,769.6) $2,270,840,147.5) => The value of the Cash Flow today
$3,112,791,740.6)
Sum of present value of cash flowsYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13
( 74,760,000.0) $120,209,500.0) $138,240,925.0) $158,977,063.8) $182,823,623.3) $210,247,166.8) $220,759,525.1) $231,797,501.4)
Shares Outstanding #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!
Intrinsic Value per($Share 41.6) => This is your estimate of how much the stock is worth using the Discounted Cash Flows method!
Current Share Price
( 24.9)
Upside Potential 67.2% Company: Graph of Future Cash Flows

Relative Valuation Analysis

Comparable Companies P/E Ratio => P/E Ratio is the most common metric to for relative valuation. P/E ratios on average vary between 5 to 30.
Acushnet 18.6) => P/E Ratio is the Share Price / (Net Income divided by # of Shares Outstanding)
JP Morgan #REF! => On Yahoo Finance, "Competitors" tab pulls up other companies in the industry.
Bank of America #REF! => Knowing that Samsung is the major smartphone competitor, add them as well
Capital One #REF! Companies with low earnings visibililty tend to trade at low P/E
Discover 9.8) => Companies with high earnings growth tend to trade at high P/E
Comparable Average #REF! => The average of the industry
1) 2) 3) 4) 5) 6) 7) 30) 8)
Deserved Premium / Discount to
0%Avg => Does your company deserve to trade at a discount or premium to their peers? Do they have higher / lower margins? Are they growing faster / slower? Are they more / less sustainable?
Target P/E Multiple #REF! => Your estimate of what you feel the company is "worth" on a P/E basis. A bad company may get only 5, average 15, and the best company may get 30 P/E Ratio

Projected Annual Forecast

Period Actual Future Yr 1 Future Yr 2 Future Yr 3 Future Yr 4 Future Yr 5
Revenue $1,640,000,000.0)$1,886,000,000.0)$2,168,900,000.0)$2,494,235,000.0)$2,868,370,250.0)$3,298,625,787.5)
Net Income $100,120,000.0) $115,138,000.0) $132,408,700.0) $152,270,005.0) $175,110,505.8) $201,377,081.6)
Earnings per Share (EPS)#VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! => Use earnings per share 3 Yrs in the future

Intrinsic Value per Share#VALUE! => This is your estimate of how much the stock is worth using the relative valuation method!
Current Share Price
( 24.9)
Upside Potential #VALUE!