Valuation Models

Use this model to calculate the Enterprise Value of a company using the Discounted Cash Flow (or DCF) method. The model uses Unlevered Free Cash Flows as the basis for the valuation.

Acitve Model Description can go here

About This Model

This Discounted Cash Flow Model uses Unlevered Free Cash Flow as the basis for the DCF valuation. Unlevered Free Cash Flow reflects the cash flow that is available to all providers of capital including equity, debt and hybrids.

This DCF model is based on annual cash flows and runs for a five (5) year period. At the end of the five years, the terminal value of the business is calculated using an EBITDA multiple. Cash flows are discounted to present values using the company’s weighted average cost of capital.

This model requires the following inputs, which are to be entered in the yellow shaded cells:

  • Weighted Average Cost of Capital (WACC)
  • Terminal EBITDA multiple
  • Year 1 revenue and expenses
  • Annual growth in revenue and expenses – from years 2 to 5
  • Corporate income tax rate
  • Annual depreciation expense
  • Annual capital expenditure
  • Annual change in working capital

The key output from this model is the Enterprise Value — which reflects the market value of the whole company — that is the sum of claims of all the security-holders including debt, preferred and common equity, minority shareholders, etc.

About Sumwise

Sumwise is a new type of online spreadsheet designed specifically for financial modeling. Current spreadsheet technologies (like Excel and Google Docs) are powerful and flexible, but they are also unstructured and error prone. And spreadsheets, once built, are not easy to modify or extend.

Sumwise addresses all of these problems with clever features like: user defined row and column names; rows and columns that can be tagged with meaningful keywords; and cell groups that share a common formula and formatting across a range a related cells.

Sumwise was invented and developed by a small dedicated team of software developers and spreadsheet experts in Sydney, Australia. If you’re interested in learning more please visit our website or send us an email.

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Helpful Videos

Valuation Models

by Darren Miller

Discounted cash flow model

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