Practice: value Ardent Packaging

A short practice case. Build a four-year DCF on the mid-year convention from the assumptions in the workbook and fill every output cell.

Conventions

All amounts in millions. The valuation date is the end of the last financial year (the start of year 1).
Gross profit is revenue less cost of sales; EBITDA is gross profit less operating expenses. Both costs are given as a percentage of revenue; operating expenses exclude D&A.
Tax is the tax rate applied to EBIT. A loss gives a tax credit (a negative tax).
Unlevered free cash flow is EBIT less tax, plus D&A, less capex, less the working capital investment: a percentage of the increase in revenue over the year before.
Mid-year convention: each year's free cash flow is received in the middle of the year and discounted over (year number − 0.5) years.
Terminal value: Gordon growth on the year-4 free cash flow grown one year. It is valued at the end of year 4 and discounted over four full years.
Equity value is enterprise value less net debt (a net cash position adds to it). The implied multiple is enterprise value over year-1 EBITDA.

Cells to fill

Session

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