Lab 5 - DCF (Filled)
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Jan 9, 2024
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Uploaded by AdmiralJay493
342 Term Project -- Lab 5: DCF
Name: Company Stock Ticker:
Prompt:
Instructions:
Do Not Delete Any Columns, Rows, or Cells in this Workbook. It will me
Part A: Practice
On the tab "DCF - Practice"
-The CFO has provided you with some Pro Forma (abbreviated) fina
-The red flags in each cell tell you what should be in the cell or give -Blue font always means you inputted a value yourself and will be g
-The cells with orange boxes will be our "driver cells". The assumpti
Part B: You Try
On the tab "DCF - You Try"
-Repeat the analysis from the practice DCF for your own company
-You will need to get data for your own company from the same sou
-Driver cells can either be the default assumption or you can hardco
-You can mess around with assumptions until you get a price that yo
Tips / FAQ:
Make sure you have your signs correct when subtracting things like chang
The CFO has tasked you with performing a fundamental valuation of the CFO will have a better idea of whether the stock is overvalued or underva
significantly undervalued, they might be interested in buying back some sell some issue new shares at a premium to fund future projects. To do so, you (DCF). This information will go on slide 19 and 20 of your presentation.
You must work on this lab by yourself, though you can ask questions to not submit anyone else's workbook as your own work.
Applied Materials Inc.
AMAT
ess up the grading!
ancial statements and internal estimates of growth. Fill in the table where necessary with that informati
you some guidance. More detailed instructions are on the right side of the page, including the order y
graded for accuracy, black font is a calculation and will be graded for accuracy and using a formula to ref
tions we make in these cells (calculations or input values) will drive forecasts for future periods. These w
urces as the 3M example
ode or calculate your own assumptions
ou believe makes sense (does not have to be equal to today's price). Your assumptions must be "reason
ge in NWC and in the FCF calculation
company as a whole. With this valuation, the alued relative to internal estimates. If the stock is shares at a discount.
If it is overvalued, they might will need to perform a discounted cash flow analysis classmates, the TA, or the professor. You may
tion.
you should fill things in.
ference other cells. See the key on the right hand side of the page.
will all be formulas and must contain references to other cells.
nable" and your must provide a rationale for them in your term project/
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59632
86612
Discounted Cash Flow Valuation
Discount (n)
1.00 2.00 3.00 4.00 5.00 Capitalization (FY0)
%
Steps:
Net Debt
11,725 19%
1.) Fill all input cells using sample company data
Past---> Future---> Total Equity
51,575 81%
2.) Use input data to calculate growth, margin, ratios, and other missing numbers in
FY-4
FY-3
FY-2
FY-1
FY0
FY1
FY2
FY3
FY4
Total Capitalization
63,300 3.) Use numbers from FY-4 to FY to calculate driver cells in FY2 to FY4
Sales
32,136
32,184
35,355
34,229
31,737
32,859
33,061
33,264
33,468
4.) Calculate remaining calculation cells in FY2 to FY4 using driver cells
YoY
0.1%
9.9%
-3.2%
-7.3%
3.5%
0.6%
0.6%
0.6%
WACC
5.) Fill in Capitalization table, WACC, Terminal Growth
Risk free rate
Ignore in this Lab, for later Lab
6.) Discount future cash flows back to present using PV=FV/(1+r)^t
EBITDA
8,417
8,755
9,284
8,947
7,908
8,679
8,658
8,711
8,764
Market risk premium
Ignore in this Lab, for later Lab
7.) Add together the discounted projected cash flows and the discounted terminal v
Margin
26.2%
27.2%
26.3%
26.1%
24.9%
26.4%
26.2%
26.2%
26.2%
Beta
Ignore in this Lab, for later Lab
8.) Subtract off net debt to see how much future cash is going to shareholders, then
Cost of Equity
7.0%
D&A
1,593
1,911
1,915
1,831
1,848
2,013
1,852
1,863
1,875
Wtd. Cost of equity
5.7%
Key:
% of sales
5.0%
5.9%
5.4%
5.3%
5.8%
6.1%
5.6%
5.6%
5.6%
5,921 <--- Input cells (hard code only, graded for accuracy) Cost of debt
2.46%
33,061 <--- Calculation cells (formulas only, graded for accuracy and usi
EBIT
6,824
6,844
7,369
7,116
6,060
6,666
6,806
6,848
6,890
Wtd. Cost of debt
0.5%
0.6% <--- Driver cells (formulas, graded for accuracy, must contain a re
Margin
21.2%
21.3%
20.8%
20.8%
19.1%
20.3%
20.6%
20.6%
20.6%
5,473 <--- Free cash flow output (formulas, graded for accuracy, must c
WACC (Discount Rate)
6.2%
Capex
1,699
1,501
1,603
1,749
1,695
1,737
1,674
1,685
1,695
A real DCF would not have the boxes filled in with color. So once you are done, you c
Capex / D&A
1.07 0.79 0.84 0.96 0.92 0.86 0.90 0.90 0.90 Terminal Growth
Terminal Growth Rate
0.5%
Chg. Working Capital 3,285
-666
-1,203
121
187
34
34
34
Working capital 3,749
7,034
6,368
5,165
5,286
5,473
5,507
5,540
5,574
NPV / Implied Share Price Calculation
% of sales
11.7%
21.9%
18.0%
15.1%
16.7%
16.7%
16.7%
16.7%
16.7%
NPV through FY0-FY4
23,829 NPV terminal value
78,402 Pre-tax Profit (EBT)
5,712
6,711
7,204
6,392
5,445
6,410
6,300
6,339
6,378
Enterprise Value
102,231 Margin
17.8%
20.9%
20.4%
18.7%
17.2%
19.5%
19.1%
19.1%
19.1%
Tax
1,142
1,327
1,283
615
800
1,282
1,070
1,076
1,083
Implied Equity Value
90,506 Tax Rate
20.0%
19.8%
17.8%
9.6%
14.7%
20.0%
17.0%
17.0%
17.0%
Diluted Shares Outstanding
549 Net income
4,570
5,384
5,921
5,777
4,645
5,128
5,230
5,263
5,295
Equity value per share
$164.78
Free Cash Flow 5,576
2,642
7,064
7,786
5,292
5,473
5,880
5,916
5,952
Discounted FCF
4,985
4,856
4,915
4,658
4,415
Sample Company Data
The CFO has provided some historical data and projections below to help you create your DCF.
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Source: https://www.marketscreener.com/quote/stock/3M-COMPANY-4836/financials/
Source: https://finance.yahoo.com/quote/MMM/balance-sheet?p=MMM
n FY-4 to FY1
value (sum of all cash flows from FY5+ as a growing perpetuity)
n divide by sharecount to find the present value of all future projected CFs per share
ing a formula to reference other cells) eference to other cells) contain a reference to other cells) can change the fill color to transparent. Keep the blue text color to show it’s a hardcoded value.
86612
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Discounted Cash Flow Valuation
Discount (n)
1.00 2.00 3.00 4.00 5.00 Capitalization (FY0)
%
Steps:
Net Debt
56,500 45%
1.) Get the company data, see instructions below in the "Company Data" section
Past---> Future---> Total Equity
69,540 55%
2.) Fill all input cells using sample company data
FY-4
FY-3
FY-2
FY-1
FY0
FY1
FY2
FY3
FY4
Total Capitalization
126,040 3.) Use input data to calculate growth, margin, ratios, and other missing numbers in
Sales
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
4.) Use numbers from FY-4 to FY to calculate driver cells in FY2 to FY4
YoY
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
WACC
5.) Calculate remaining calculation cells in FY2 to FY4 using driver cells
Risk free rate
Ignore in this Lab, for later Lab
5.) Fill in Capitalization table, WACC, Terminal Growth
EBITDA
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
Market risk premium
Ignore in this Lab, for later Lab
6.) Discount future cash flows back to present using PV=FV/(1+r)^t
Margin
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Beta
Ignore in this Lab, for later Lab
7.) Add together the discounted projected cash flows and the discounted terminal v
Cost of Equity
7.0%
8.) Subtract off net debt to see how much future cash is going to shareholders, then
D&A
0
0
0
0
0
0
0
0
0
Wtd. Cost of equity
3.9%
% of sales
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Cost of debt
2.46%
Key:
EBIT
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
Wtd. Cost of debt
1.1%
5,921 <--- Input cells (hard code only, graded for completion) Margin
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
33,061 <--- Calculation cells (formulas only, graded for completion and WACC (Discount Rate)
5.0%
0.6% <--- Driver cells (formulas or hard coded assumptions of your ow
Capex
30,000
30,000
30,000
30,000
30,000
30,000
#DIV/0!
#DIV/0!
#DIV/0!
5,473 <--- Free cash flow output (formulas, graded for completion, mu
Capex / D&A
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
Terminal Growth
Terminal Growth Rate
0.5%
Chg. Working Capital 0
0
0
0
0
0
0
0
Working capital 30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
NPV / Implied Share Price Calculation
% of sales
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
NPV through FY0-FY4
#DIV/0!
NPV terminal value
#DIV/0!
Pre-tax Profit (EBT)
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
Enterprise Value
#DIV/0!
Margin
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Tax
0
0
0
0
0
0
0
0
0
Implied Equity Value
#DIV/0!
Tax Rate
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Diluted Shares Outstanding
843 Net income
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
Equity value per share
#DIV/0!
Free Cash Flow 0
0
0
0
0
0
#DIV/0!
#DIV/0!
#DIV/0!
Discounted FCF
0
0
#DIV/0!
#DIV/0!
#DIV/0!
Questions
Question 1: How does the price compare to today's price for your company?
It is different
Question 2: How does the price compare to the price implied by your previous multiple method analysis?
Not sure
Company Data
You will need to screenshot the pages from marketscreener.com (all financials except for working capital) and yahoo finance (working capital) and paste below
The screenshots should look very similar to the ones on the practice tab, except your numbers and years will of course be different.
Here are the links to the pages for 3M… find your own company page:
Note: The grading is slightly different on the "You Try" tab
Note: A real DCF would not have the boxes filled in with color. So once you are don
https://www.marketscreener.com/quote/stock/3M-COMPANY-4836/financials/
https://finance.yahoo.com/quote/MMM/balance-sheet?p=MMM
n FY-4 to FY1
value (sum of all cash flows from FY5+ as a growing perpetuity)
n divide by sharecount to find the present value of all future projected CFs per share
using a formula to reference other cells) wn, graded for completion) ust contain a reference to other cells) ne, you can change the fill color to transparent. Keep the blue text color to show it’s a hardcoded value.
86612
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1 Problem 2- Prepare a vertical analysis schedule
3 Here is the operating data for Yalis Cleaning, Inc.:
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10 Purpose
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12
13 Instructions
14 After analyzing the transactions, prepare a vertical analysis schedule for the company for 2021 and 2020 using service revenue
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16
17 Guidance
18 For formatting guidance, see the vertical analysis examples that are provided in Chapter 13 of the textbook.
6T…
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I need subpart 2 and 3 answered of the question I posted in the 2 pictures (I have the 1st subpart done). I have answers A-C, I need the answers to D-L. Thank you!
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All answers must be entered as a formula only. Please reference the correct cell(s) or the cell(s) value.
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- Connect Assignment 1 i
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[The following information applies to the questions displayed below.]
Following are the transactions of a new company called Pose-for-Pics.
August 1 M. Harris, the owner, invested $14,500 cash and $62,350 of photography equipment in the company.
August 2 The company paid $4,000 cash for an insurance policy covering the next 24 months.
August 5 The company purchased supplies for $2,755 cash.
August 20 The company received $2,950 cash from taking photos for customers.
August 31 The company paid $885 cash for August utilities.
Open a ledger account for Cash in balance column format. Post general journal entries that impact cash from above transaction
ledger account for cash.
ces
101: Cash
Date
Debit
Credit
Balance
of 10
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Equivalent Units and Related Costs; Cost of Production Report; Entries
Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the
materials pass through the Reaction and Filling departments, emerging as finished chemicals.
The balance in the account Work in Process-Filling was as follows on January 1:
Work in Process-Filling Department
(3,500 units, 30% completed):
Direct materials (3,500 x $10.60)
$37,100
Conversion (3,500 x 30% x $6.80)
7,140
$44,240
The following costs were charged to Work in Process-Filling during January:
Direct materials transferred from Reaction
Department: 45,200…
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FINANCIAL MANAGEMENT 1.docx -
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Problem 1.
2.
Odette Electronics has 90 operating plants in seven southwestern states. Sales for
last year were P100 million, and the statement of financial position at year-end is
similar in percentage of sales to that of previous years (and this will continue in the
future). All assets (including fixed assets) and current liabilities will vary directly with
sales.
Statement of Financial Position
(in P millions)
Assets
Liabilities and Equity
Cash.....
P2
Accounts payable....
P15
Accounts receivable...
20
Accrued wages....
2
Inventory....
23
Accrued taxes.
8
Current assets..
P45
Current liabilities.
P25
Fixed assets...
40
Notes payable...
10
Ordinary shares.
15
Retained earnings...
35
Total assets..
P85
Total liabilities and equity..
P85
Odette's has an after-tax…
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All answers must be entered as a formula only. Please reference the correct cell(s) or the cell(s) value.
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Info in image "ACC PT1" can be used for image "ACC PT2"
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Excel formula:
1. Begin each formula with an = sign
2. Reference cells, instead of entering values
Example: =B3+C3
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I need help with parts b - e.
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
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