Please fill out Assumptions with Formulas and Answers. Assumptions
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Please fill out Assumptions with Formulas and Answers.
| Assumptions | |||||||||||||||||
| Historicals | Stage 1 | Stage 2 | |||||||||||||||
| Assumption | 2017 | 2018 | 2019 | Average | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | |||
| Revenue Growth | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| Operating Margin | |||||||||||||||||
| Industry | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| Tax Rate | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| WC/Sales | |||||||||||||||||
| Industry | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| CAPEX / Sales | |||||||||||||||||
| Industry | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| Depreciation / CAPEX | |||||||||||||||||
| Industry | |||||||||||||||||
| XYZ Tech | |||||||||||||||||
| Forecast Period Ending September | Total | ||||||||||||||||
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | |||||||
| Operating Cash Flows | |||||||||||||||||
| Revenue | 6,475.0 | ||||||||||||||||
| Operating Income | |||||||||||||||||
| Provision for Taxes | |||||||||||||||||
| NOPAT | |||||||||||||||||
| Change in Sales | |||||||||||||||||
| Additional Working Capital Req's | |||||||||||||||||
| CapEx | |||||||||||||||||
| Depreciation | |||||||||||||||||
| Net CapEx | |||||||||||||||||
| Free Cash Flows | |||||||||||||||||
| Present Value of Interim Cash Flows | |||||||||||||||||
| Timing of Cash Flows | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5.5 | 6.5 | 7.5 | 8.5 | 9.5 | |||||||
| Discount Rate | |||||||||||||||||
| Discount Factors | |||||||||||||||||
| Present Value of Cash Flows | |||||||||||||||||
| Terminal Value Estimate | |||||||||||||||||
| Terminal Cash Flow | |||||||||||||||||
| Value of Perpetuity | |||||||||||||||||
| Terminal Growth | |||||||||||||||||
| Present Value of Perpetuity | |||||||||||||||||
| Enterprise Value | |||||||||||||||||
| Present Value of Cash Flows | |||||||||||||||||
| Present Value of Perpetuity | |||||||||||||||||
| Enterprise Value | |||||||||||||||||
| Equity Value | |||||||||||||||||
| Enterprise Value | |||||||||||||||||
| Less Cash and Cash Equivalents | |||||||||||||||||
| Less Debt | |||||||||||||||||
| Equity Value | |||||||||||||||||
| Balance Sheet Item | 2016 | 2017 | 2018 | 2019 |
| Cash and cash equivalents | 1,015.0 | 1,264.0 | 1,078.0 | 1,185.0 |
| Marketable securities | 230.0 | 211.0 | 178.0 | 226.0 |
| Accounts receivable, net | 578.0 | 610.0 | 630.0 | 695.0 |
| Inventories, net | 302.0 | 320.0 | 508.0 | 705.0 |
| Prepaid expenses | 100.0 | 109.0 | 57.0 | 77.0 |
| Total current assets | 2,225.0 | 2,514.0 | 2,451.0 | 2,888.0 |
| Property and equipment, net | 99.0 | 164.0 | 248.0 | 296.0 |
| Goodwill | 0.0 | 289.0 | 289.0 | 289.0 |
| Other assets | 303.0 | 279.0 | 321.0 | 310.0 |
| Total assets | 2,627.0 | 3,246.0 | 3,309.0 | 3,783.0 |
| Short-term debt | 0.0 | 440.0 | 136.0 | 201.0 |
| Accounts payable | 350.0 | 483.0 | 503.0 | 552.0 |
| Accrued liabilities | 98.0 | 135.0 | 203.0 | 398.0 |
| Other current liabilities | 58.0 | 63.0 | 24.0 | 92.0 |
| Total current liabilities | 506.0 | 1,121.0 | 866.0 | 1,243.0 |
| Long-term debt, net | 852.0 | 940.0 | 1,114.0 | 1,125.0 |
| Other long-term liabilities | 113.0 | 124.0 | 192.0 | 118.0 |
| Total Liabilities | 1,471.0 | 2,185.0 | 2,172.0 | 2,486.0 |
| Common stock, par value | 9.0 | 9.0 | 9.0 | 9.0 |
| Additional paid-in capital | 2,123.0 | 2,334.0 | 2,650.0 | 2,464.0 |
| Accumulated deficit | (976.0) | (1,282.0) | (1,522.0) | (1,176.0) |
| Total stockholders' equity | 1,156.0 | 1,061.0 | 1,137.0 | 1,297.0 |
| Total liabilities and stockholders' equity | 2,627.0 | 3,246.0 | 3,309.0 | 3,783.0 |
| Income Statement Item | 2017 | 2018 | 2019 | 2020F | 2021F | 2022F |
| Net revenue | 4,319.0 | 5,253.0 | 6,475.0 | 7,446.3 | 8,190.9 | 8,764.2 |
| Cost of sales | (3,316.0) | (3,466.0) | (4,028.0) | |||
| Gross margin | 1,003.0 | 1,787.0 | 2,447.0 | |||
| Research and development | (1,008.0) | (1,196.0) | (1,434.0) | |||
| Marketing, general and administrative | (466.0) | (516.0) | (562.0) | |||
| Operating income (loss) | (471.0) | 75.0 | 451.0 | 880.0 | 890.0 | 1,156.0 |
| Interest expense | (156.0) | (126.0) | (135.0) | |||
| Other income (expense), net | 80.0 | 9.0 | 0.0 | |||
| Income (loss) before income taxes and equity loss | (547.0) | (42.0) | 316.0 | |||
| Provision for income taxes | (20.0) | (25.0) | (130.0) | |||
| Net income (loss) | (567.0) | (67.0) | 186.0 | |||
| XYZ Tech Statement of Cash Flows (select items) | ||||||
| Cash Flow Statement Items | 2017 | 2018 | 2019 | 2020F | 2021F | 2022F |
| Depreciation and amortization | 99.0 | 124.0 | 170.0 | |||
| Purchases of property and equipment (CAPEX) | (97.0) | (133.0) | (189.0) | |||
| Company | XYZ Tech |
| Industy | Tech |
| Valuation Date | 12/31/19 |
| Business Activities | VR Solutions |
| Shares Outstanding (millions) | 550.00 |
| Risk Free Rate | 2.5% |
| Tax Rate | 25.0% |
| Comparables | Revenues | Operating Income | Operating Margin | ||||||
| 2017 | 2018 | 2019 | 2017 | 2018 | 2019 | 2017 | 2018 | 2019 | |
| VR Comp 1 | 2,950 | 4,316 | 4,582 | 165 | 347 | 345 | 5.58% | 8.05% | 7.53% |
| VR Comp 2 | 2,238 | 2,408 | 2,731 | 426 | 493 | 539 | 19.01% | 20.47% | 19.72% |
| VR Comp 3 | 71,293 | 76,137 | 84,048 | 9,914 | 12,189 | 11,653 | 13.91% | 16.01% | 13.86% |
| VR Comp 4 | 6,087 | 6,614 | 7,159 | 598 | 732 | 804 | 9.82% | 11.07% | 11.23% |
| VR Comp 5 | 3,021 | 3,347 | 3,489 | 169 | 230 | 249 | 5.58% | 6.88% | 7.12% |
| VR Comp 6 | 3,975 | 4,756 | 5,162 | 555 | 692 | 709 | 13.95% | 14.54% | 13.74% |
| Median | 11.86% | 12.81% | 12.48% | ||||||
| Comparables | Shares Outstanding | Share Price | Earnings Per Share | Total Debt | Book Equity | Historical WC / Sales | Historical CAPEX / Sales | Historical Depreciation / CAPEX | |
| VR Comp 1 | 756.76 | 10.46 | 0.70 | 9,776.17 | 13,664.25 | 12.0% | 3.0% | 88.2% | |
| VR Comp 2 | 93.95 | 111.52 | 8.31 | 1,518.80 | 3,278.20 | 18.6% | 2.7% | 82.6% | |
| VR Comp 3 | 1,050.00 | 45.60 | 0.90 | 24,125.00 | 26,187.50 | 15.7% | 4.2% | 86.4% | |
| VR Comp 4 | 84.42 | 118.56 | 8.40 | 1,901.20 | 1,851.80 | 23.9% | 5.3% | 92.6% | |
| VR Comp 5 | 49.87 | 81.46 | 4.26 | 1,852.10 | 1,778.15 | 21.4% | 1.9% | 89.4% | |
| VR Comp 6 | 165.00 | 64.20 | 4.12 | 2,706.50 | 3,059.75 | 14.2% | 3.3% | 77.3% | |
Expert Answer:
Okay lets work through this stepbystep Assumptions Revenue Growth XYZ Tech Provide the revenue growth rate assumptions for each year Operating Margin Industry Provide the operating margin assumptions ... View the full answer
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