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    Basic Blank Discounted Cash Flow (DCF) Template

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    Namit

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Basic Blank Discounted Cash Flow (DCF) Template

    Uploaded by

    Namit
    28 views3 pages

    Original Title

    E-Text3BHRH121314

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    Copyright:

    © All Rights Reserved
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    28 views3 pages

    Basic Blank Discounted Cash Flow (DCF) Template

    Uploaded by

    Namit

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    DISCOUNTED CASH FLOW ANALYSIS

    ($ in thousands, except per share data)


    Estimated Projected
    2003 2004 2005 2006 2007

    EBITDA
    EBIT
    Less: Cash Taxes @ 0.0% -
    Basic blank Discounted
    Tax-effected EBIT
    Plus: Depreciation & Amortization
    Cash Flow (DCF) template
    Less: Capital expenditures
    Less: Change in net working capital
    Unlevered free cash flow

    WACC @ 10.0%
    NPV of Unlevered free cash flow @ 10.0%

    EBITDA MULTIPLE METHOD


    Terminal Value Undiscounted Discounted Implied Perpetual Growth Rate
    EBITDA Multiple 7.0x
    9.0x

    DCF Range (Implied Enterprise Value) –

    Equity Value (a) –


    (b) –
    Implied Price per Share

    PERPETUITY GROWTH METHOD


    Terminal Value Undiscounted Discounted Implied EBITDA Multiple
    Perpetuity Growth Rate 2.0%
    4.0%

    DCF Range (Implied Enterprise Value) –

    (a) –
    Equity Value
    (b) –
    Implied Price per Share

    Note: Present Values as of January 1, 2003.

    Providing financial training to Wall Street ® © Hamilton Lin, CFA


    WALL ST 12 hamilton@hlcp.net
    TRAINING www.wallst-training.com
    DISCOUNTED CASH FLOW ANALYSIS

    Hilb, Rogal & Hamilton


    Discounted Cash Flow Analysis
    ($ in thousands, except per share data)
    Estimated Projected
    2003 2004 2005 2006 2007

    EBITDA $ 170,893 $ 212,556 $ 253,078 $ 287,925 $ 327,248


    EBIT 153,939 195,318 236,868 272,592 313,058
    Less: Cash Taxes @ 41.0% 41.0% (63,115) (80,080) (97,116) (111,763) (128,354)
    Tax-effected EBIT $ 90,824 $ 115,238 $ 139,752 $ 160,829 $ 184,704
    Plus: Depreciation & Amortization 16,954 17,238 16,210 15,333 14,191
    Less: Capital expenditures (7,500) (8,500) (9,500) (10,500) (11,500)
    Less: Change in net working capital (7,687) (6,458) (5,607) (4,042) (4,378)
    Unlevered free cash flow $ 92,591 $ 117,517 $ 140,855 $ 161,620 $ 183,017

    WACC @ 10.0%
    NPV of Unlevered free cash flow @ 10.0% $ 511,149

    Step 1:
    TIP: Calculate NPV of
    Reference in correct Unlevered free cash
    figures from completed flow using the “NPV”
    function in Excel
    Income Statement
    projections

    Providing financial training to Wall Street ® © Hamilton Lin, CFA


    WALL ST 13 hamilton@hlcp.net
    TRAINING www.wallst-training.com
    DISCOUNTED CASH FLOW ANALYSIS

    EBITDA MULTIPLE METHOD


    Terminal Value Undiscounted Discounted Implied Perpetual Growth Rate
    EBITDA Multiple 7.0x $ 2,290,737 $ 1,422,367 1.8%
    CF*(1+g) / (WACC - g) = TV
    9.0x 2,945,233 1,828,758 3.5%
    TV (WACC-g) = CF * (1+g)
    TV*WACC -TV*g = CF + CF*g
    DCF Range (Implied Enterprise Value) Terminal Year EBITDA $ 1,933,517 – $ 2,339,908 g*(TV+CF) = TV*WACC-CF
    * EBITDA Multiple g = (TV*WACC-CF) / (TV+CF)
    (a)
    Equity Value $ 1,803,491 – $ 2,209,882
    Implied Price per Share (b)
    $ 51.69 – $ 63.34 =(I22*$D$17-$M$11)/(I22+$M$11)

    USE NORMALIZED FIGURE (2007 TAX-


    EFFECTED EBIT) AS BEGINNING
    PERPETUITY GROWTH METHOD CASH FLOW AND NOT 2007 FCF
    Terminal Value Undiscounted Discounted Implied EBITDA Multiple
    Perpetuity Growth Rate 2.0% $ 2,354,976 $ 1,462,255 7.2x =($M$11*(1+H33))/($D$17-H33)
    4.0% 3,201,536 1,987,902 9.8x

    DCF Range (Implied Enterprise Value) $ 1,973,404 – $ 2,499,051 Undiscounted TV / 2007 EBITDA
    =I33/M$8
    (a)
    Equity Value $ 1,843,379 – $ 2,369,026
    (b)
    Implied Price per Share $ 52.84 – $ 67.90

    Note: Pres ent Values as of January 1, 2003.


    (a) Ass um es $130,026M of net debt. $ 130,026
    (b) Ass um es 34,889M s hares outs tanding. Step 2: 34,889

    Calculate Terminal Value using both EBITDA


    Multiple and Perpetuity Growth methods and
    calculate down to your Price per Share

    Providing financial training to Wall Street ® © Hamilton Lin, CFA


    WALL ST 14 hamilton@hlcp.net
    TRAINING www.wallst-training.com

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