[go: up one dir, main page]
Scribd
Upload
77 views12 pages

Discounted Cash Flow Analysis Guide

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.

Uploaded by

Migle Bloom
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
77 views12 pages

Discounted Cash Flow Analysis Guide

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.

Uploaded by

Migle Bloom
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 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


+ =

You might also like