DISCOUNTED CASH FLOW METHOD

PARTICULARS 2021 2022 2023 ₹ 2,024

REVENUE ₹ 120,000 ₹ 138,000 ₹ 158,700 ₹ 182,505
COGS ₹ 60,000 ₹ 69,000 ₹ 79,350 ₹ 91,253
GROSS PROFIT ₹ 60,000 ₹ 69,000 ₹ 79,350 ₹ 91,253
OPERATING EXPS ₹ 32,000 ₹ 33,600 ₹ 35,280 ₹ 37,044
EBDIT ₹ 28,000 ₹ 35,400 ₹ 44,070 ₹ 54,209
DEPRECIATION ₹ 10,000 ₹ 9,000 ₹ 8,100 ₹ 7,290
EBIT ₹ 18,000 ₹ 26,400 ₹ 35,970 ₹ 46,919
INTEREST ₹ 8,000 ₹ 8,000 ₹ 8,000 ₹ 8,000
EBT ₹ 10,000 ₹ 18,400 ₹ 27,970 ₹ 38,919
TAX @ 20% ₹ 2,000 ₹ 3,680 ₹ 5,594 ₹ 7,784
EAT ₹ 8,000 ₹ 14,720 ₹ 22,376 ₹ 31,135
DEPRECIATION ₹ 10,000 ₹ 9,000 ₹ 8,100 ₹ 7,290
₹ 18,000 ₹ 23,720 ₹ 30,476 ₹ 38,425
WC INV INCREASE ₹ 2,500 ₹ 2,800 ₹ 3,136 ₹ 3,512
FREE CASH FLOW ₹ 15,500 ₹ 20,920 ₹ 27,340 ₹ 34,912

9%
YEAR FREE CF DF=WACC DCF
2021 15500 0.92 14220.18349 ₹ 1
2022 20920 0.84 17607.94546 ₹ 2
2023 27340 0.77 21111.49634 ₹ 3
2024 34912 0.71 24732.88101 ₹ 4
dcf 77672.5063

INPUT OUTPUT
RAW MATERIAL SWEETS
RICE 2 KG 10 BOXES
SUGAR 2 KGS
GHEE 1 KG
5 KGS

10 KGS 20 BOXES

CAPITAL PROFIT
100 CR 22 CR

236 CR 52 CR TARGET

WACC ₹ 0
GROWTH ₹ 0
 ₹ 8 %
YEAR CF DF=WACC-G
1 XX
2 XX
3 XX
4 XX
5 XX
6 XX

LISTED COS
target co comparable co

capital
(equity + pref+ reserves)
debt

CAPITAL 516 CR
DEBT
58 EBIT

RATE OF RETURN

BENCHMARK PRICE 516 CR

POSSIBLE STRIKE -16 (-)
CERTAIN CONTRACTS 25 (+)
NEW TECH 6 (+)
PROJECTION 8 (+)
DISCOUNT -10
VALUATION OF NW 529

ASSET BASED VALUATION

NET ADJUSTED VALUE / ECONOMIC BOOK VALUE

FIXED ASSETS: EBV

LAND XX WORTH COST - DEPRECIATION
BLDG WORTH
PNM WORTH
FIXTURES WORTH
EQUIPMENTS WORTH

GOODWILL WORTH COST - AMORTISATION

COPYRIGHT WORTH
TRADEMARK WORTH
IP WORTH
 INVESTMENTS MARKET VALUE

CURR ASSETS CURRENT PRICES

DEBTORS 200000 REALISABLE VALUE
INSOLVENT 15000 185000

TOTAL
LESS:
LIABILITIES
LONG TERM LOAN AMT- REPAYMENT
SHORT TERM OUTSTANDING
CURRENT LIAB ACTUAL PAYABLE

EBV

INTANGIBLE ASSET VALUATION

COST MARKET ESTIMATION OF PAST N FUTURE EARNINGS

522 ₹ 482 ₹ 620

10% ₹ 0 ₹ 1 100%
40% ₹ 0 ₹ 0
52.2 ₹ 72 0 ₹ 465 589.5

208.8 ₹ 145 0 ₹ 186 539.4

capital ₹ 8,900,000 land ₹ 5,200,000

reserves ₹ 5,600,000 build ₹ 7,800,000
debentures ₹ 2,000,000 machine ₹ 2,500,000 2500000
loans ₹ 1,112,000 furniture ₹ 1,400,000
tools ₹ 500,000
debtors ₹ 240,000
creditors ₹ 1,200,000 inventory ₹ 1,200,000
o/s exps ₹ 78,000 cash ₹ 50,000

₹ 18,890,000 ₹ 18,890,000

there is appreciation in land of 200000

build lost a wing in highway construction worth 2000000
machiney lost in fire ₹ 500,000
debtors of 14000 are insolvent
inventory of 220000 became obsolete , scrap value of the same is 20000
o/s exps of 12000 are now not payable
one of the customers lodged a complaint and a sum of 14000 is due towards him, which is not recorded in bs
find the value of blue circle ltd by appropriate asset value method
 Following information is given about ABC Ltd
Calculate the free Cash Flow of the enterprise and subsequently calculate
The cost of capital of the enterprise is 9%
PARTICULARS 2021 2022
120000 REVENUE ₹ 120,000 ₹ 138,000
8% COGS ₹ 60,000 ₹ 69,000
6 OPERATING EXPS ₹ 32,000 ₹ 33,600
DEPRECIATION ₹ 10,000 ₹ 9,000
₹ 2,104 INTEREST ₹ 8,000 ₹ 8,000
INTEREST DEPRECIATION ₹ 10,000 ₹ 9,000
PRINCIPAL WC INV INCREASE ₹ 2,500 ₹ 2,800
TAX @ 20%

PARTICULARS 2021 2022

REVENUE ₹ 120,000 ₹ 138,000
COGS ₹ 60,000 ₹ 69,000
GROSS PROFIT ₹ 60,000 ₹ 69,000
98672.48 OPERATING EXPS ₹ 32,000 ₹ 33,600
EBDIT ₹ 28,000 ₹ 35,400
DEPRECIATION ₹ 10,000 ₹ 9,000
1 1 1 EBIT ₹ 18,000 ₹ 26,400
(1+r)^n (1+9%)^1 (1.09)^1 INTEREST ₹ 8,000 ₹ 8,000
EBT ₹ 10,000 ₹ 18,400
TAX @20% ₹ 2,000 ₹ 3,680
PAT/EAT ₹ 8,000 ₹ 14,720
DEPRECIATION ₹ 10,000 ₹ 9,000
₹ 18,000 ₹ 23,720
WC INV INCREASE ₹ 2,500 ₹ 2,800
CASH FLOW ₹ 15,500 ₹ 20,920

YEAR CASH FLOW DF @ 9%

1 ₹ 15,500 0.91743119
2 ₹ 20,920 0.84167999
3 ₹ 27,340 0.77218348
4 ₹ 34,912 0.70842521

Following information is given about ABC Ltd

Calculate the free Cash Flow of the enterprise and subsequently calculate
The cost of capital of the enterprise is 12%
PARTICULARS 2021 2022
REVENUE ₹ 220,000 ₹ 253,000
COGS ₹ 110,000 ₹ 126,500
OPERATING EXPS ₹ 32,000 ₹ 33,600
DEPRECIATION ₹ 12,000 ₹ 10,800
INTEREST ₹ 5,000 ₹ 5,000
 WC INV INCREASE ₹ 5,200 ₹ 5,824
TAX @ 25%

REVENUE ₹ 220,000 ₹ 253,000

COGS ₹ 110,000 ₹ 126,500
GP ₹ 110,000 ₹ 126,500
OP ₹ 32,000 ₹ 33,600
EBDIT ₹ 78,000 ₹ 92,900
D ₹ 12,000 ₹ 10,800
EBIT ₹ 66,000 ₹ 82,100
I ₹ 5,000 ₹ 5,000
EBT ₹ 61,000 ₹ 77,100
100 T ₹ 15,250 ₹ 19,275
EAT ₹ 45,750 ₹ 57,825
220 D ₹ 12,000 ₹ 10,800
₹ 57,750 ₹ 68,625
320 WC ₹ 5,200 ₹ 5,824
₹ 52,550 ₹ 62,801
36 DF @ 12%
1 ₹ 52,550 0.89285714
11.25 % 2 ₹ 62,801 0.79719388
3 ₹ 74,803 0.71178025
4 ₹ 88,821 0.63551808

COST - DEPRECIATION

COST - AMORTISATION
EPAYMENT

₹ 11,984,000.00
nterprise and subsequently calculate the value of ABC ltd based on Cash Flow Approach

2023 2024
₹ 158,700 ₹ 182,505
₹ 79,350 ₹ 91,253
₹ 35,280 ₹ 37,044
₹ 8,100 ₹ 7,290
₹ 8,000 ₹ 8,000
₹ 8,100 ₹ 7,290
₹ 3,136 ₹ 3,512

2023 2024
₹ 158,700 ₹ 182,505
₹ 79,350 ₹ 91,253
₹ 79,350 ₹ 91,253
₹ 35,280 ₹ 37,044
₹ 44,070 ₹ 54,209
₹ 8,100 ₹ 7,290
₹ 35,970 ₹ 46,919
₹ 8,000 ₹ 8,000
₹ 27,970 ₹ 38,919
₹ 5,594 ₹ 7,784
₹ 22,376 ₹ 31,135
₹ 8,100 ₹ 7,290
₹ 30,476 ₹ 38,425
₹ 3,136 ₹ 3,512
₹ 27,340 ₹ 34,912

DCF
₹ 14,220
₹ 17,608
₹ 21,111
₹ 24,733
₹ 77,673

nterprise and subsequently calculate the value of ABC ltd based on Cash Flow Approach

2023 2024
₹ 290,950 ₹ 334,592
₹ 145,475 ₹ 167,296
₹ 35,280 ₹ 37,044
₹ 9,720 ₹ 8,748
₹ 5,000 ₹ 5,000
₹ 6,523 ₹ 7,306

₹ 290,950 ₹ 334,592
₹ 145,475 ₹ 167,296
₹ 145,475 ₹ 167,296
₹ 35,280 ₹ 37,044
₹ 110,195 ₹ 130,252
₹ 9,720 ₹ 8,748
₹ 100,475 ₹ 121,504
₹ 5,000 ₹ 5,000
₹ 95,475 ₹ 116,504
₹ 23,869 ₹ 29,126
₹ 71,606 ₹ 87,378
₹ 9,720 ₹ 8,748
₹ 81,326 ₹ 96,126
₹ 6,523 ₹ 7,306
₹ 74,803 ₹ 88,821
DCF
₹ 46,920
₹ 50,065
₹ 53,244
₹ 56,447
₹ 206,675
YEAR CASH FLOW DF @ 10% DCF
1 ₹ 200,000 0.909091 ₹ 181,818
2 ₹ 350,000 0.826446 ₹ 289,256
3 ₹ 450,000 0.751315 ₹ 338,092
4 ₹ 520,000 0.683013 ₹ 355,167
5 ₹ 680,000 0.620921 ₹ 422,226
PV ₹ 1,586,560
PRESENT VALUE
VALUE OF BUSINESS:
SELL ₹ 2,000,000
LOAN AMORTISATION SCHEDULE

YEAR
2021 OPENING INTT PRINCIPAL EMI CLOSING BAL
JAN 120000 800 1304 2104 118696
FEB 118696 791 1312.693333 2104 117383.3
MAR 117383.3 783 1321.444622 2104 116061.9
APR 116061.9 774 1330.254253 2104 114731.6
MAY 114731.6 765 1339.122615 2104 113392.5
JUN 113392.5 756 1348.050099 2104 112044.4
JUL 112044.4 747 1357.037099 2104 110687.4
AUG 110687.4 738 1366.084013 2104 109321.3
SEP 109321.3 729 1375.19124 2104 107946.1
OCT 107946.1 720 1384.359182 2104 106561.8
NOV 106561.8 710 1393.588243 2104 105168.2
DEC 105168.2 701 1402.878831 2104 103765.3

9013

pa
840
sal 2500000 sp 60
stip 1800000 vc 14
elect 720000 cont 46
trav 1080000
var food 50000 76.67%
6150000 17,217
profit 10000 792,000.00
6160000 892,000.00
19,391.30
7333.333 892,000.00
100,000.00