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DCF Business Valuation

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DCF Business Valuation Powered By Docstoc
					VALUATION BASED (ON DCF MODEL)

                                                   GUIDELINES
This template uses a DCF Model to value a business. DCF is used as tool to compare the valuation of the business with
current market value and manifests the attractiveness of the business. DCF uses future free cash flows and discounts it with
Weighted Average Cost of Capital score to arrive at the present value of the business. The DCF for an investment is
calculated by estimating the cash you will have to pay out and the cash you think you will receive back. The times that you
expect to receive the payments must also be estimated. Each cash transaction must then be discounted by the opportunity cost
of capital over the time between now and when you will pay or receive the cash.


Assumptions               Assumptions on which the valuation is done
Forecasted P&L            Forecasted P&L
Balance Sheet             Balance Sheet
WACC                      Weighted Average Cost of Capital
Valuation                 Free cash flow calculation

Note: cells marked in yellow require your input.




© Copyright 2013 Docstoc Inc.                                                                                                  1
                                                              ASSUMPTIONS

Note: cells marked in yellow require your input.
Revenue Growth Rate Assumptions                                                          Sustainable
                                                   2012 E 2013 E 2014 E 2015 E 2016 E   2017 Onwards    Phase   Types of Phases
             1   Product 1                               0%     0%     0%     0%     0%            0%           Introduction
             2   Product 2                               0%     0%     0%     0%     0%            0%           Growth
             3   Product 3                               0%     0%     0%     0%     0%            0%           Mature
             4   Product 4                               0%     0%     0%     0%     0%            0%           Decline
             5   Product 5                               0%     0%     0%     0%     0%            0%

WC Change as a Percentage of Revenue (%)               0%      0%      0%     0%      0%          0%
EBITDA as a % of Sales                                 0%      0%      0%     0%      0%          0%
Tax Rate (%)                                           0%      0%      0%     0%      0%          0%
Capital Expenditure (%)                                0%      0%      0%     0%      0%          0%
Depreciation (%)                                       0%      0%      0%     0%      0%          0%
Terminal Growth Rate                                   0%

Assumptions for Free Cash Flow Valuation:
          1 xxxxx
          2 xxxxx
          3 xxxxx
          4 xxxxx
          5 xxxxx
          6 xxxxx
          7 xxxxx




© Copyright 2013 Docstoc Inc.                                                                                                     2
                                                                   FORECASTED P&L

Note: cells marked in yellow require your input.

                                                           2009     2010   2011   2012 E   2013 E   2014 E   2015 E   2016 E   2017 and Onwards
Operating Revenues as Adjusted
Product 1                                                   100      200    300     300      300      300      300      300                300
Product 2                                                   250      350    450     450      450      450      450      450                450
Product 3                                                     -        -      -       -        -        -        -        -                  -
Product 4                                                     -        -      -       -        -        -        -        -                  -
Product 5                                                     -        -      -       -        -        -        -        -                  -
Total Operating Revenues                                    350      550    750     750      750      750      750      750                750

Total Operating Expenses                                     75       80     90

Operating Income (Loss)                                     275      470    660

Other Income (Expense)
Interest Expense                                               -       -      -
Equity in Net Income of Affiliates                             -       -      -
Other Income (Expense) – Net                                   -       -      -
Total other income (expense)                                   -       -      -

Income (Loss) from Continuing Operations Before Income Taxes 275     470    660
Income Tax (Benefit) Expense                                   -       -      -
Income (Loss) from Continuing Operations                     275     470    660
Income (Loss) from Discontinued Operations, Net of Tax         -       -      -
Net Income (Loss)                                            275     470    660
Less: Net Income Attributable to Noncontrolling Interest       -       -      -
Net Income (Loss) Attributable to Company                    275     470    660




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                                                   BALANCE SHEET

Note: cells marked in yellow require your input.

                                                                                2009   2010   2011
Assets
                Current Assets
                Cash and cash equivalents                                         -      -      -

                Accounts receivable – net of allowances for doubtful accounts     -      -      -
                Prepaid expenses                                                  -      -      -
                Deferred income taxes                                             -      -      -
                Other current assets                                              -      -      -
                Total current assets                                              -      -      -

                Property, Plant and Equipment – Net                               -      -      -
                Goodwill                                                          -      -      -
                Licenses                                                          -      -      -
                Customer Lists and Relationships – Net                            -      -      -
                Other Intangible Assets – Net                                     -      -      -
                Investments in Equity Affiliates                                  -      -      -
                Other Assets                                                      -      -      -
Total Assets                                                                      -      -      -

Liabilities and Stockholders’ Equity

Current Liabilities
                Debt maturing within one year                                     -      -      -
                Accounts payable and accrued liabilities                          -      -      -
                Advanced billing and customer deposits                            -      -      -
                Accrued taxes                                                     -      -      -
                Dividends payable                                                 -      -      -
                Total current liabilities                                         -      -      -

Long-Term Debt                                                                    -      -      -

Deferred Credits and Other Noncurrent Liabilities
               Deferred income taxes                                              -      -      -
               Postemployment benefit obligation                                  -      -      -
               Other noncurrent liabilities                                       -      -      -
               Total deferred credits and other noncurrent liabilities            -      -      -

Stockholders’ Equity
               Common Stock                                                       -      -      -
                Additional paid-in capital                                        -      -      -
                Retained earnings                                                 -      -      -
                Treasury stock                                                    -      -      -
                Accumulated other comprehensive income                            -      -      -
                Noncontrolling interest                                           -      -      -
                Total stockholders’ equity                                        -      -      -

Total Liabilities and Stockholders’ Equity                                        -      -      -


© Copyright 2013 Docstoc Inc.                                                                        4
                       WEIGHTED AVERAGE COST OF CAPITAL

Note: cells marked in yellow require your input.

Beta                                                   0.56
Return from Market (Rm)                                22%
Risk Free Return (Rf)                                   5%
Risk Premium                                           17%
Pre Tax Cost of Debt                                   12%
Tax Rate                                                0%
Market Value of Debt                                      -
Market Value of Equity                             168,000
Total Capital                                      168,000

                                             Equity           Debt          Capital
Market Value                                     168,000         336,000         504,000
Weight in Cost of Capital                          33.33%          66.67%        100.00%
Cost of Component                                     14%          12.00%         12.68%




© Copyright 2013 Docstoc Inc.                                                              5
                                                            VALUATION

Note: cells marked in yellow require your input.

Year                                               2012 E        2013 E       2014 E         2015 E         2016 E         2017 and onwards

Nat Sales                                               750           750              750            750            750               750
EBITDA as a % of Sales                                   0%            0%               0%             0%             0%                0%
EBITDA                                                    -             -                -              -              -                 -
Depreciation (% of Sales)                                0%            0%               0%             0%             0%                0%
Depreciation                                              -             -                -              -              -                 -
Operating Profit                                          -             -                -              -              -                 -
Tax Rate on EBIT (%)                                     0%            0%               0%             0%             0%                0%
Tax                                                       -             -                -              -              -                 -
NOPAT                                                     -             -                -              -              -                 -
Depreciation                                              -             -                -              -              -                 -
CAPEX                                                     -             -                -              -              -                 -
% of Sales                                               0%            0%               0%             0%             0%                0%
Working Capital                                           -             -                -              -              -                 -
% of Sales                                               0%            0%               0%             0%             0%                0%

Cash Flow for DCF                                            -            -             -              -              -                   -

WACC (%)                                             12.68%        12.68%        12.68%         12.68%         12.68%                12.68%
Terminal Growth Rate                                                                                                                  0.00%

Present Value of Cash Flows                                  -            -             -              -              -
Terminal Value                                                                                                                            -

FCFF                                                         -
Net Debt                                                     -

FCFE                                                      -
No. of shares                                         6,495

Share Price Acc to Valuation                                 -

Current Market Price                                        27




© Copyright 2013 Docstoc Inc.                                                                                                                 6
				
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Description: This form provides a spreadsheet that uses a discounted cash flow (DCF) model to value a business. The DCF model utilizes future free cash flows and then applies a discount rate, based on the weighted average cost of capital (WACC), to calculate the present value of a business. There are five worksheets which the user must complete in order to arrive at a proper valuation: assumptions, forecasted P&L, balance sheet, WACC, and valuation. This DCF Business Valuation can be used to calculate a present value of the future cash flows that will be generated by a business or investment opportunity.