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At Wacc

The document provides a financial overview for the years 2018 to 2020, detailing profit after tax, depreciation, long-term interest, and free cash flow. It calculates the net present value (NPV) at 11% and outlines working capital and capital expenses. Additionally, it distinguishes between cost of equity and cost of capital based on the entity's financing structure.

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danicaleroux
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16 views4 pages

At Wacc

The document provides a financial overview for the years 2018 to 2020, detailing profit after tax, depreciation, long-term interest, and free cash flow. It calculates the net present value (NPV) at 11% and outlines working capital and capital expenses. Additionally, it distinguishes between cost of equity and cost of capital based on the entity's financing structure.

Uploaded by

danicaleroux
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

1.

2018 2019 2020


R'000 R'000 R'000

Profit after tax 8,541.00 6,817.00 6,712.00


Add back:
Depreciation(non cash) 1,848.00 2,742.00 3,721.00
Long term interest 250.00 250.00 250.00
Tax on interest -67.50 -67.50 -67.50

10,571.50 9,741.50 10,615.50

Working Capital -520.00 -235.00 295.00


Capital expenses -6,086.00 -7,215.00 -8,617.00
Free cash flow 3,965.50 2,291.50 2,293.50
Terminal value 40,136.25
42,429.75

Terminal value (2293,5 x 1.05)


(0.11- .05)

= 40,136

NPV @ 11% 36,456.62 at WACC

Valuation

Free cash flow NPV 36,456.62


Long term loan -1,000.00
Debentures -882.14
34,574.48

Debentures = (0,13 x 950) / 0,14


= 882.14

Working capital calculation 2017 2018 2019 2020


Inventory 1,000.00 1,800.00 1,900.00 2,100.00
Trade and other receivables 500.00 520.00 550.00 590.00
Trade and other payables -500.00 -700.00 -650.00 -970.00
Overdraft -40.00 -30.00 -35.00 -30.00
Current tax payable -1,250.00 -1,360.00 -1,300.00 -1,520.00
-290.00 230.00 465.00 170.00
Movement -520.00 -235.00 295.00

Capital expenses
2018 2019 2020
Opening balance 5,000.00 9,238.00 13,711.00
Depreciation -1,848.00 -2,742.00 -3,721.00
Closing balance -9,238.00 -13,711.00 -18,607.00
Purchased -6,086.00 -7,215.00 -8,617.00

TOTAL

1.2
Cost of equity:
When an entity has 100% EQUITY. Or
When using free cash flow to equity method
Cost of capital:
When an entity has equity and debt. Or
When using the free cash flow to firm method
0.5 P

1
1
1

1 P
1 P

1
0.5

1 P

1
1 P

1
1
1
1
1

1
1
1

20

1
1
2

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