Discounted Cash Flow (DCF) Analysis Levered
Microsoft Corporation (MSFT)
Technology
Free Cash Flow
Year A/P | 2013 Actual | 2014 Actual | 2015 Actual | 2016 Actual | 2017 Actual | 2018 Actual | 2019 Actual | 2020 Projected | 2021 Projected | 2022 Projected | 2023 Projected |
| Revenue | 77,849.00 | 86,832.77 | 93,579.68 | 91,155.97 | 96,570.63 | 110,360.92 | 125,844.55 | 136,528.76 | 148,120.05 | 160,695.44 | 174,338.48 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | |||||||||||
| Operating Cash Flow | 28,835.27 | 32,501.51 | 29,664.76 | 33,326.62 | 39,507.05 | 43,879.50 | 52,187.74 | 51,662.48 | 56,048.63 | 60,807.16 | 65,969.68 |
| Operating Cash Flow (%) | |||||||||||
| Capital Expenditure | -4,258.34 | -5,487.83 | -5,942.31 | -8,340.77 | -8,131.25 | -11,632.04 | -13,930.99 | -11,181.71 | -12,131.03 | -13,160.96 | -14,278.32 |
| Capital Expenditure (%) | |||||||||||
| Free Cash Flow | 24,576.93 | 27,013.68 | 23,722.45 | 24,985.85 | 31,375.80 | 32,247.46 | 38,256.74 | 40,480.78 | 43,917.59 | 47,646.20 | 51,691.36 |
Weighted Average Cost Of Capital
| Share price | $ 136.33 |
|---|---|
| Diluted Shares Outstanding | 7,753.00 |
| Cost of Debt | |
| Tax Rate | 10.18 |
| After-tax Cost of Debt | -0.46 |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 12.14 |
| Total Debt | 72,850.00 |
| Total Equity | 1,056,966.49 |
| Total Capital | 1,129,816.49 |
| Debt Weighting | 6.45 |
| Equity Weighting | 93.55 |
| Wacc |
Build Up Free Cash Flow
Year A/P | 2013 Actual | 2014 Actual | 2015 Actual | 2016 Actual | 2017 Actual | 2018 Actual | 2019 Actual | 2020 Projected | 2021 Projected | 2022 Projected | 2023 Projected |
| Revenue | 77,849.00 | 86,832.77 | 93,579.68 | 91,155.97 | 96,570.63 | 110,360.92 | 125,844.55 | 136,528.76 | 148,120.05 | 160,695.44 | 174,338.48 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 28,835.27 | 32,501.51 | 29,664.76 | 33,326.62 | 39,507.05 | 43,879.50 | 52,187.74 | 51,662.48 | 56,048.63 | 60,807.16 | 65,969.68 |
| Capital Expenditure | -4,258.34 | -5,487.83 | -5,942.31 | -8,340.77 | -8,131.25 | -11,632.04 | -13,930.99 | -11,181.71 | -12,131.03 | -13,160.96 | -14,278.32 |
| Free Cash Flow | 24,576.93 | 27,013.68 | 23,722.45 | 24,985.85 | 31,375.80 | 32,247.46 | 38,256.74 | 40,480.78 | 43,917.59 | 47,646.20 | 51,691.36 |
| WACC | |||||||||||
| PV LFCF | 29,085.24 | 28,262.05 | 27,462.16 | 26,684.90 | |||||||
| SUM PV LFCF | 193,489.34 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 11.65 |
| Free cash flow (t + 1) | 53,868.12 |
| Terminal Value | 704,158.40 |
| Present Value of Terminal Value | 405,860.45 |
Intrinsic Value
| Enterprise Value | 602,897.80 |
|---|---|
| Net Debt | -60,973.10 |
| Equity Value | 663,870.90 |
| Shares Outstanding | 7,753.00 |
| Equity Value Per Share | 85.06 |
Results Levered DCF
| Wacc / Long-term Growth | -4 (%) | -3 (%) | -2 (%) | -1 (%) | 0 (%) | 1 (%) | 2 (%) | 3 (%) | 4 (%) |
|---|---|---|---|---|---|---|---|---|---|
| 13.65 (%) | 62.40 Sell | 65.08 Sell | 68.21 Sell | 71.92 Sell | 76.41 Sell | 81.94 Sell | 88.91 Sell | 97.97 Sell | 110.25 Sell |
| 13.15 (%) | 60.72 Sell | 63.15 Sell | 65.99 Sell | 69.33 Sell | 73.33 Sell | 78.21 Sell | 84.28 Sell | 92.05 Sell | 102.35 Sell |
| 12.65 (%) | 59.16 Sell | 61.39 Sell | 63.96 Sell | 66.98 Sell | 70.56 Sell | 74.89 Sell | 80.22 Sell | 86.94 Sell | 95.69 Sell |
| 12.15 (%) | 57.72 Sell | 59.76 Sell | 62.11 Sell | 64.84 Sell | 68.07 Sell | 71.93 Sell | 76.63 Sell | 82.49 Sell | 89.99 Sell |
| 11.65 (%) | 56.39 Sell | 58.27 Sell | 60.41 Sell | 62.90 Sell | 65.81 Sell | 69.27 Sell | 73.44 Sell | 78.58 Sell | 85.06 Sell |
| 11.15 (%) | 55.16 Sell | 56.88 Sell | 58.85 Sell | 61.11 Sell | 63.75 Sell | 66.86 Sell | 70.59 Sell | 75.12 Sell | 80.78 Sell |
| 10.65 (%) | 54.01 Sell | 55.60 Sell | 57.41 Sell | 59.48 Sell | 61.87 Sell | 64.68 Sell | 68.02 Sell | 72.05 Sell | 77.01 Sell |
| 10.15 (%) | 52.94 Sell | 54.41 Sell | 56.07 Sell | 57.97 Sell | 60.16 Sell | 62.70 Sell | 65.71 Sell | 69.30 Sell | 73.68 Sell |
| 9.65 (%) | 51.95 Sell | 53.31 Sell | 54.84 Sell | 56.58 Sell | 58.58 Sell | 60.90 Sell | 63.61 Sell | 66.83 Sell | 70.72 Sell |