Scribd
Upload
39 views8 pages

Calculation of FCFE and FCFF Years 1 2 3

The document calculates free cash flows to the firm (FCFF) and free cash flows to equity (FCFE) for a firm over 5 years and a terminal period to value the firm. It provides financial information like revenues, expenses, depreciation, capital expenditures, changes in working capital, debt balances, and equity values over the periods. It then calculates WACC and discount rates used to determine the present value of the FCFF and FCFE cash flows, yielding values of $5,376,482 for the firm and a negative $2,189,614 for equity.

Uploaded by

Aanchal Narula
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
39 views8 pages

Calculation of FCFE and FCFF Years 1 2 3

The document calculates free cash flows to the firm (FCFF) and free cash flows to equity (FCFE) for a firm over 5 years and a terminal period to value the firm. It provides financial information like revenues, expenses, depreciation, capital expenditures, changes in working capital, debt balances, and equity values over the periods. It then calculates WACC and discount rates used to determine the present value of the FCFF and FCFE cash flows, yielding values of $5,376,482 for the firm and a negative $2,189,614 for equity.

Uploaded by

Aanchal Narula
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 8

Less:

Less:
Less:
Less:
Add:
Less:
Less:
Less:
Add:
Add:

Years
Revenues
Opertaing Expenses
Depreciation
EBIT
Interest
PBT
Taxes
PAT
Depreciation
CapEx
Changes in WC
Principal repayment
FCFE
Interest net of Taxes
Principal repayment
FCFF
Ke
WACC
Value of firm
Value of equity

1
4,000,000.00
3,100,000.00
300,000.00
600,000.00
650,000.00
(50,000.00)
(50,000.00)
300,000.00
350,000.00
200,000.00
600,000.00
(900,000.00)
390,000.00
600,000.00
90,000.00

Calculation of FCFE and FCFF


2
3
4,600,000.00
5,290,000.00
3,565,000.00
4,099,750.00
345,000.00
396,750.00
690,000.00
793,500.00
590,000.00
530,000.00
100,000.00
263,500.00
40,000.00
105,400.00
60,000.00
158,100.00
345,000.00
396,750.00
402,500.00
462,875.00
230,000.00
264,500.00
600,000.00
600,000.00
(827,500.00)
(772,525.00)
354,000.00
318,000.00
600,000.00
600,000.00
126,500.00
145,475.00

25.50%
24.22%
22.67%
15.75%
15.11%
14.33%
77,753.78
94,942.87
95,495.45
-717131.474104 -530815.590373 -403973.598306

CFE and FCFF


4
6,083,500.00
4,714,712.50
456,262.50
912,525.00
470,000.00
442,525.00
177,010.00
265,515.00
456,262.50
532,306.25
304,175.00
600,000.00
(714,703.75)
282,000.00
600,000.00
167,296.25

5
Terminal Value
6,996,025.00
7,695,627.50
5,421,919.38
5,964,111.31
524,701.88
577,172.06
1,049,403.75
1,154,344.13
410,000.00
350,000.00
639,403.75
804,344.13
255,761.50
321,737.65
383,642.25
482,606.48
524,701.88
577,172.06
612,152.19
673,367.41
349,801.25
384,781.38
600,000.00
(653,609.31)
1,629.76
246,000.00
210,000.00
600,000.00
192,390.69
211,629.76

21.08%
19.62%
13.54%
12.81%
96,725.54
5,011,564.85
-308682.471745 -229010.638676

18.42%
12.21%
Value of the firm:

5,376,482.49
(2,189,613.77)

Add:

Calculation of DE ratio
Years
1
Debt
5,900,000.00

2
5,300,000.00

3
4,700,000.00

Equity
PAT
Total Equity

1,950,000.00
60,000.00
2,010,000.00

2,010,000.00
158,100.00
2,168,100.00

Years
Ke
weight of equity
Kd
weight of debt
Beta
DE Ratio
WACC

2,000,000.00
(50,000.00)
1,950,000.00

1
25.50%
0.5
6%
0.5
3
3.03
15.75%

2
24.22%
0.5
6%
0.5
2.77
2.64
15.11%

3
22.67%
0.5
6%
0.5
2.49
2.17
14.33%

4
4,100,000.00

5 Terminal Year
3,500,000.00
2,900,000.00

2,168,100.00
265,515.00
2,433,615.00

2,433,615.00
383,642.25
2,817,257.25

4
21.08%
0.5
6%
0.5
2.20
1.68
13.54%

2,817,257.25
482,606.48
3,299,863.73

5
Terminal Year
19.62%
18.42%
0.5
0.5
6%
6%
0.5
0.5
1.93
1.71
1.24
0.88
12.81%
12.21%

Revenues
Operating Expenses

Base Year
4,000,000.00
3,100,000.00

Growth rate during


forecast period

15%

Growth rate during


terminal period
CapEx
Depreciation

10%
350,000.00
300,000.00

WC Charge (% of
revenue)
Interest on debt
Principal repayment
each year during
forecast period
Financing Structure
Debt
Equity

Beta
Ke
Rp
D/E
Tax Rate

5%
10%

600,000.00
6,500,000.00
2,000,000.00

3
25.50%
5.50%
0.5
40%

Less:

Years
Opening Balance
Repayment
Closing Balance

Interest Calculation

1
6,500,000.00
600,000.00
5,900,000.00

650,000.00

2
5,900,000.00
600,000.00
5,300,000.00

590,000.00

3
5,300,000.00
600,000.00
4,700,000.00

530,000.00

4
4,700,000.00
600,000.00
4,100,000.00

470,000.00

5 Terminal Year
4,100,000.00
3,500,000.00
600,000.00
600,000.00
3,500,000.00
2,900,000.00

410,000.00

350,000.00

Terminal value as per FCFE


Terminal Value

19,366.11

Terminal value as per FCFF


Terminal Value

9,585,756.83

You might also like