Equity Analysis Excel Model
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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/equity-analysis-excel-model-416 This is a Equity Analysis Model in Excel. This Tool is very helpful in the development of a Business Case.
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Equity Analysis Excel Model
- 1. CAPITAL BUDGETING WORKSHEET 5 Equity Analysis of a Project INPUT SHEET: USER ENTERS ALL BOLD NUMBERS IN YELLOW CELLS INITIAL INVESTMENT CASHFLOW DETAILS Initial Investment= Opportunity cost (if any)= Lifetime of the investment Salvage Value at end of project= Deprec. method(1:St.line;2:DDB)= Revenues in year 1= $100,000 Var. Expenses as % of Rev= $5,000 DISCOUNT RATE Approach(1:Direct;2:CAPM)= $65,000 1 1. Discount rate = 13% 10 Fixed expenses in year 1= $15,000 $50,000 Tax rate on net income= 33% 2a. Beta= b. Riskless rate= 3% 0.6 5.00% Other invest.(non-depreciable)= 1 If you do not have the breakdown of fixed and variable c. Market risk premium = 5.50% 10% expenses, input the entire expense as a % of revenues. d. Debt Ratio = 12.00% e. Cost of Borrowing = 12.00% Discount rate used= Tax Credit (if any )= 3.00% 0 WORKING CAPITAL Initial Investment in Work. Cap= $10,000 Working Capital as % of Rev= 10% Salvageable fraction at end= 100% GROWTH RATES 1 2 3 4 5 6 7 8 9 10 Revenues Do not enter 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Fixed Expenses Do not enter 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 4 5 6 7 8 9 10 Default: The fixed expense growth rate is set equal to the growth rate in revenues by default. YEAR 0 1 2 3 INITIAL INVESTMENT Investment - Tax Credit Net Investment + Working Cap + Opp. Cost + Other invest. Initial Investment $100,000 $10,000 $90,000 $10,000 $5,000 $0 $105,000 Equipment Working Capital Lifetime Index Revenues -Var. Expenses - Fixed Expenses EBITDA - Depreciation EBIT -Tax EBIT(1-t) + Depreciation - ∂ Work. Cap NATCF Discount Factor Discounted CF $0 $0 ($105,000) 1 ($105,000) 1 $65,000 $8,450 $15,000 $41,550 $5,000 $36,550 $12,062 $24,489 $5,000 ($3,500) $32,989 1.03 $32,028 $0 $0 1 $68,250 $8,873 $15,750 $43,628 $5,000 $38,628 $12,747 $25,880 $5,000 ($3,175) $34,055 1.0609 $32,101 SALVAGE VALUE $0 $0 $0 $0 $0 $0 $0 $0 OPERATING CASHFLOWS 1 1 1 1 $71,663 $75,246 $79,008 $82,958 $9,316 $9,782 $10,271 $10,785 $16,538 $17,364 $18,233 $19,144 $45,809 $48,099 $50,504 $53,029 $5,000 $5,000 $5,000 $5,000 $40,809 $43,099 $45,504 $48,029 $13,467 $14,223 $15,016 $15,850 $27,342 $28,877 $30,488 $32,180 $5,000 $5,000 $5,000 $5,000 $3,841 $358 $376 $395 $28,501 $33,518 $35,112 $36,785 1.092727 1.12550881 1.159274074 1.194052297 $26,082 $29,781 $30,288 $30,807 $0 $0 1 $87,106 $11,324 $20,101 $55,681 $5,000 $50,681 $16,725 $33,956 $5,000 $415 $38,541 1.229873865 $31,338 $0 $0 $0 $0 $50,000 $10,084 1 1 1 $91,462 $96,035 $100,836 $11,890 $12,484 $13,109 $21,107 $22,162 $23,270 $58,465 $61,388 $64,458 $5,000 $5,000 $5,000 $53,465 $56,388 $59,458 $17,643 $18,608 $19,621 $35,822 $37,780 $39,837 $5,000 $5,000 $5,000 $436 $457 $480 $40,386 $42,323 $44,356 1.266770081 1.304773184 1.343916379 $31,881 $32,437 $77,713 Investment Measures NPV = $249,454 IRR = 30.20% ROC = 40.86% Book Value (beginning) Depreciation BV(ending) $100,000 $100,000 $5,000 $95,000 $95,000 $5,000 $90,000 BOOK VALUE & DEPRECIATION $90,000 $85,000 $80,000 $5,000 $5,000 $5,000 $85,000 $80,000 $75,000 $75,000 $5,000 $70,000 $70,000 $5,000 $65,000 $65,000 $5,000 $60,000 $60,000 $5,000 $55,000 $55,000 $5,000 $50,000