Example

Given the following inputs below, calculate the value of private company ABC
Inputs (Insert variables here)
Net income
Depreciation
Amortization charge
interest on borrowings
Tax rate
Fixed Capital investment
Working capital investment
Net borrowings
Expected growth
Weighted average cost of capital

N'M
70
6
4
12
0.3
25
30
(15)
0.02
0.05

Please click on the solution sheet fo

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Mo

mpany ABC

n the solution sheet for the solution

ansition to IFRS (i.e. conversion of NGAAP Financials) and IFRS Implementations going-forward.

dging Transactions

rparty)
s, Equity swaps, Currency swaps, Swaptions, Exotic swaps, etc)
BSM) MODEL, BINOMIAL MODEL and MONTE CARLO SIMULATIONS)
s

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or@deloitte.com

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Inputs
NI
D
A
Int
T
FC
WC
g
WACC
B

N'M
70
6
4
12
0.3
25
30
0.02
0.05
-15

Results for Private Company ABC

Free cash flow to firm

N'M
33.40

Fair Value of private firm

1,135.60

Fair Value to equity owners

1,150.60

Free cashflow to equity owners

10.00

Capitalized Cash flow model - Note the following

This is a single stage cash flow model. It assumes stable growth to perpetuity.
Firm Value is determined by determining a single measure of economic benefit and dividing t
Formula
FCFF
WACC - g
Also note that FCFF must be the expected free cash flow to the firm over the next year. This c
current Free cash flow to firm using a determined sustainable growth rate.

perpetuity.
omic benefit and dividing that by a capitalization rate

m over the next year. This can be achieved by growing the