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    Discounted Cash Flow Analysis

    Uploaded by

    Migle Bloom
    The document outlines methods for valuing a company using discounted cash flow analysis. It discusses calculating free cash flow, weighted average cost of capital, present value of cash flows, and two methods for determining firm value - perpetuity growth and EBITDA multiple. Key inputs include tax rates, capital expenditures, depreciation, EBITDA, risk free rate, beta, cost of equity, cost of debt, terminal growth rate, and EBITDA multiple. Firm value is calculated under each method using the present value of cash flows and terminal value.

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    Download as XLSX, PDF, TXT or read online from Scribd

    Discounted Cash Flow Analysis

    Uploaded by

    Migle Bloom
    9 views12 pages
    The document outlines methods for valuing a company using discounted cash flow analysis. It discusses calculating free cash flow, weighted average cost of capital, present value of cash flows, and two methods for determining firm value - perpetuity growth and EBITDA multiple. Key inputs include tax rates, capital expenditures, depreciation, EBITDA, risk free rate, beta, cost of equity, cost of debt, terminal growth rate, and EBITDA multiple. Firm value is calculated under each method using the present value of cash flows and terminal value.

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    The document outlines methods for valuing a company using discounted cash flow analysis. It discusses calculating free cash flow, weighted average cost of capital, present value of cash flows, and two methods for determining firm value - perpetuity growth and EBITDA multiple. Key inputs include tax rates, capital expenditures, depreciation, EBITDA, risk free rate, beta, cost of equity, cost of debt, terminal growth rate, and EBITDA multiple. Firm value is calculated under each method using the present value of cash flows and terminal value.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    9 views12 pages

    Discounted Cash Flow Analysis

    Uploaded by

    Migle Bloom
    The document outlines methods for valuing a company using discounted cash flow analysis. It discusses calculating free cash flow, weighted average cost of capital, present value of cash flows, and two methods for determining firm value - perpetuity growth and EBITDA multiple. Key inputs include tax rates, capital expenditures, depreciation, EBITDA, risk free rate, beta, cost of equity, cost of debt, terminal growth rate, and EBITDA multiple. Firm value is calculated under each method using the present value of cash flows and terminal value.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 12

    Discounted Cash Flow Analysis

    Company Name
    (000s)
    FREE CASH FLOW (FCF) 20XX 20XX 20XX 20XX

    EBIT
    Tax
    Tax Rate
    Tax-Effected EBIT

    Plus :
    Depreciation
    Amortization

    Less :
    Capital Expenditures
    Change in Working Capital

    Free Cash Flow

    WC = Current Year Assets - Current Year Liabilities


    Change in WC = CYWC - PYWC CY - current year; PY - prev year

    WEIGHTED AVERAGE COST OF CAPITAL (WACC)

    Weighted Average Cost of Capital

    Cost of Equity Cost of Debt


    Risk Free Rate Cost of Debt
    Expected Market Return Tax Rate
    Beta After Tax Cost of Debt
    Cost of Equity
    E / (D + E) D / (D + E)

    PRESENT VALUE OF CASH FLOWS (PV of CF) 20XX 20XX 20XX 20XX
    Year 1 Year 2 Year 3 Year 4

    Discount Factor
    Present Value of Cash Flows
    FIRM VALUE : PERPETUITY GROWTH RATE METHOD

    Growth Rate in Perpetuity

    WACC PV of CF PV of Terminal Value


    + =

    FIRM VALUE : EBITDA MULTIPLE METHOD

    EBITDA Multiple

    WACC PV of CF PV of Terminal Value


    + =
    20XX

    nt year; PY - prev year

    of Debt

    20XX
    Year 5
    Firm Value

    Firm Value
    WEIGHTED AVERAGE COST OF CAPITAL (WACC)

    Weighted Average Cost of Capital

    Cost of Equity
    Risk Free Rate
    Expected Market Return
    Beta
    Cost of Equity
    E / (D + E)

    PRESENT VALUE OF CASH FLOWS (PV of CF) 20XX


    Year 1

    Discount Factor
    Present Value of Cash Flows

    FIRM VALUE : PERPETUITY GROWTH RATE METHOD

    Growth Rate in Perpetuity

    WACC PV of CF

    FIRM VALUE : EBITDA MULTIPLE METHOD

    EBITDA Multiple

    WACC PV of CF
    Cost of Debt
    Cost of Debt
    Tax Rate
    After Tax Cost of Debt

    D / (D + E)

    20XX 20XX 20XX 20XX


    Year 2 Year 3 Year 4 Year 5

    PV of Terminal Value Firm Value


    + =

    PV of Terminal Value Firm Value


    + =
    PRESENT VALUE OF CASH FLOWS (PV of CF) 20XX
    Year 1

    Discount Factor
    Present Value of Cash Flows

    FIRM VALUE : PERPETUITY GROWTH RATE METHOD

    Growth Rate in Perpetuity

    WACC PV of CF

    FIRM VALUE : EBITDA MULTIPLE METHOD

    EBITDA Multiple

    WACC PV of CF
    20XX 20XX 20XX 20XX
    Year 2 Year 3 Year 4 Year 5

    PV of Terminal Value Firm Value


    + =

    PV of Terminal Value Firm Value


    + =
    FIRM VALUE : PERPETUITY GROWTH RATE METHOD

    Growth Rate in Perpetuity

    WACC PV of CF

    FIRM VALUE : EBITDA MULTIPLE METHOD

    EBITDA Multiple

    WACC PV of CF
    PV of Terminal Value Firm Value
    + =

    PV of Terminal Value Firm Value


    + =
    FIRM VALUE : PERPETUITY GROWTH RATE METHOD

    Growth Rate in Perpetuity

    WACC PV of CF

    FIRM VALUE : EBITDA MULTIPLE METHOD

    EBITDA Multiple

    WACC PV of CF
    PV of Terminal Value Firm Value
    + =

    PV of Terminal Value Firm Value


    + =

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