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Valuation Project Report: Calculation of NOPAT and FCFF for SamDee

Analyzing SamDee Inc.'s financial statements and calculating various financial metrics.

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Added on  2023-06-03

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This project report provides the calculation of NOPAT and FCFF for SamDee, along with the cost of capital and stock value of the company. It includes past three year free cash flows, forecast FCF, and TV growth patterns.

Valuation Project Report: Calculation of NOPAT and FCFF for SamDee

Analyzing SamDee Inc.'s financial statements and calculating various financial metrics.

   Added on 2023-06-03

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Running Head: Valuation
1
Project Report: Valuation
Valuation Project Report: Calculation of NOPAT and FCFF for SamDee_1
Valuation
2
Question 1:
The NOPAT level of the company of last 3 years is as follows:
Calculation of NOPAT
2015
$’000
2016
$’000
2017
$’000
Operating Activities
Operating revenue
Sales Revenue 600,000 630,000 661,500
Other income - - -
Total operating revenue 600000.0 630000.0 661500.0
Operating expense
Cost of sales
-
336,000.00
-
353,526.90
-
366,163.40
Depreciation
-
30,000.00
-
31,564.90
-
32,693.16
Interest expenses
-
17,518.35
-
18,394.16
-
19,313.24
Total operating expense
-
383,518.35
-
403,485.96
-
418,169.80
Net operating profits before tax 216,481.65 226,514.04 243,330.20
Income tax expense
-
26,592.66
-
27,475.82
-
31,945.75
Tax Shelter (30%) 5,255.51 5,518.25 5,793.97
Net operating profit after tax
(NOPAT) 184,633.49 193,519.97 205,590.48
Question 2:
FCFF calculations:
Free Cash Flow Model Value Forecast Forecast Forecast Forecast Forecast
2017 2018 2019 2020 2021 2022
Year 1 2 3 4 5
1. Forecast FCF 204697.22 208791.17 212966.99 217226.33 221570.86
Debt (NFO) 225,321
Valuation Project Report: Calculation of NOPAT and FCFF for SamDee_2
Valuation
3
2. Estimate cost of capital for
the firm 10.82% 1.11 1.23 1.36 1.51 1.67
3. Calculate forecast FCF
growth patterns 2.0% 2.0% 2.0% 2.0%
to determine TV
4. Calculate TV 2,562,384
5. Discounted FCF 787,790 184,711 170,011 156,480 144,026 132,563
Discounted TV 1,533,040 1,533,040
Total value of the firm 2,320,830
NFO 225,321
Total value of equity 2,095,509
Number of shares
outstanding 50,000
Estimated Share Price 41.91
Question 3:
FCFF calculations:
Past three Year Free Cash Flows for Firm
2016 2017 2018E
Earnings before interest and tax 244,908 262,643 267,896
Less: Tax @30% 73,472.46 78,793.03 80,368.89
After tax EBIT 171,435.74 183,850.41 187,527.42
Add: Depreciation 31,564.90 32,693.16 33,347.02
Net changes in working capital 1,370.70 7,871.55 8,028.98
Total 204,371.34 224,415.12 228,903.42
Less: Capital expenditure 1,225.00 - -
Free cash flows to the firm 205,596.34 224,415.12 228,903.42
Average 219,638.29
Valuation Project Report: Calculation of NOPAT and FCFF for SamDee_3

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