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Valuation DCF & Modeling (PART 5- SPECIAL SITUATIONS (Currencies : for…

- - - - Begin modeling forecast I/S based on below assumptions & historical ratios Only expense & Revenues
        
        Next we refer to the BS for Current Assets
        
        INVENTORY is forecasted with Inventory Days assumptions and the costs of sales / 365
        
        ACC RECEIVABLE is forecasted with Acc Receiv Days assumption and the net tot revenue / 365
        
        Next we refer to the BS for Current Liabilities
        
        ACC PAYABLES is forecasted using the Acc Payable Days asssumptions and the costs of sales / 365
        
        EARNED REV & ACCRUED EXP are modeled as a % of total revenue
        
        Next we move on to supporting Schedules and Capex
        
        DEPRECIATION calculated as a % of opening balance PPE shcedule
        
        CASH CAPEX calculated as a % of revenue
        
        If we have Capex obtained under capital leases, we must move to that supporting schedule
        
        PRINCIPAL REPAYMENTS are calculate as a % of opening capital lease schedule balance
        
        CAPITAL LEASE ADDITIONS are calculated as a % of revenue
        
        We move next to any Debt & Interest Schedule
        
        3 more items...
- - - - Add back Cash from Capital & finance lease additions from supporting schedules back to FCF to get FCF LESS CAPITAL LEASES (amounts are negative since they are investments
      - Next we Calculate EBITDA including & excluding share based compensation
        
        EBIT from the income statement (the operating profit)
        
        D&A from the CF statement (depreciation & amort which is non cash expense)
        
        STOCK BASED COMPENSATION from the CF statement and add back that "expense"
        
        Calculate the FCFF
        
        OPERATING PROFIT from Income statement
        
        UNLEVERED TAXES which is the operating income x tax percentage
        
        we add back Non cash like DEPRECIATION & AMORTIZATION from CF, STOCK BASED COMPENSATION from CF, OTHER NON CASH EXPENSE from CF, we remove CASH CAPEX from investing activities CF & add CHANGES IN NET WORKING CAPITAL (all the accounts from operating activities in CF)
        
        The sum of these items gives FCFF
        
        We can also remove NET ADDITIONS FROM CAPITAL LEASES to the FCFF
        
        Next up are the DCF Assumptions
        
        Assumptions have to be justifed later by company comps & other studies
        
        TERMINAL VALUE determined by one of the 2 methods
        
        Growth rate valuation
        
        Exit Multiple valuation (company comps)
        
        DISCOUNT RATE of model
        
        VALUATION DATE (as of transaction generally)
        
        NUMBER OF SHARES OUTSTANDING as of valuation date
        
        PRESENT MKT PRICE of the share of the company
        
        Nest is the Valuation Timeline
        
        First is the link the VALUATION DATE from DCF Assumptions
        
        We extend to the whole calcualtation period
        
        TERMINAL VALUE DATE is the same date as the last year of calculation
        
        We have to make a Year Frac function for the first year since maybe not all of the cash flow of the year is atribuable to the ongoing year (if the valuation is in october for exemple)
        
        We caculate the FCFF for each year because of Year Frac
        
        2 more items...
- - - - Used by multiplying media EV/Rev Multiple by a companies estimated Revenue to get its EV back according to a sale segment
        
        We now get the Total EV of the company by adding up individual EV for each revenue segment
        
        We calculate the company's SUM OF THE PARTS (SOTP) valuation = EV + Net Debt + Minority Interest
        
        We then divide that number by the outstanding shares assumptions and we get the target share price
- - - - For each revenue segment market share
  - - - Football field Chart
        
        Data should come from Hi?Lo figures in the data sensitivity tables from the financial model