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Discounted Cash Flow (DCF) Analysis Unlevered


Graham Holdings Company

Graham Holdings Company (GHC)

Consumer Cyclical

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 2,600.602,737.132,586.322,482.092,592.052,696.252,718.622,741.192,763.942,786.882,810.01
Revenue (%)
EBITDA 578.111,891.09380.96378.02329.45473.46686.72692.42698.17703.97709.81
EBITDA (%)
EBIT 313.371,641.73-47.59285.19216.18361.30468.69472.58476.50480.46484.45
EBIT (%)
Depreciation 264.74249.35428.5592.83113.27112.16218.03219.84221.67223.51225.36
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 1,175.731,024.511,154.271,119.17964.76778.681,080.381,089.351,098.391,107.511,116.70
Total Cash (%)
Account Receivables 428.58571.24572.35615.06620.28582.39588.04592.92597.84602.80607.81
Account Receivables (%)
Inventories 2.8611.2232.0734.7560.6569.5636.7037.0137.3137.6237.94
Inventories (%)
Accounts Payable 505.82464.22428.04500.64526.44486.67505.12509.31513.54517.80522.10
Accounts Payable (%)
Capital Expenditure -206.49-237.31-136.82-66.52-60.39-98.14-138.38-139.53-140.68-141.85-143.03
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 623.14
Diluted Shares Outstanding 5.33
Cost of Debt
Tax Rate 16.11
After-tax Cost of Debt -0.76
Risk-Free Rate
Market Risk Premium
Cost of Equity 4.93
Total Debt 470.78
Total Equity 3,323.21
Total Capital 3,793.98
Debt Weighting 12.41
Equity Weighting 87.59
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 2,600.602,737.132,586.322,482.092,592.052,696.252,718.622,741.192,763.942,786.882,810.01
EBITDA 578.111,891.09380.96378.02329.45473.46686.72692.42698.17703.97709.81
EBIT 313.371,641.73-47.59285.19216.18361.30468.69472.58476.50480.46484.45
Tax Rate 14.60%19.44%-25.58%32.51%-65.65%16.11%-1.43%-1.43%-1.43%-1.43%-1.43%
EBIAT 267.611,322.51-59.76192.48358.09303.07475.37479.32483.30487.31491.35
Depreciation 264.74249.35428.5592.83113.27112.16218.03219.84221.67223.51225.36
Accounts Receivable --142.66-1.11-42.71-5.2137.89-5.65-4.88-4.92-4.96-5.00
Inventories --8.36-20.85-2.68-25.90-8.9132.86-0.30-0.31-0.31-0.31
Accounts Payable --41.60-36.1872.6025.81-39.7718.454.194.234.264.30
Capital Expenditure -30.82-100.49-70.30-6.1337.7540.231.151.161.171.18
UFCF 532.361,410.07210.16242.23459.92442.19779.30699.32705.12710.97716.87
WACC
PV UFCF 779.30667.03641.52616.98593.38
SUM PV UFCF 5,238.79

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.84
Free cash flow (t + 1) 745.55
Terminal Value 88,755.88
Present Value of Terminal Value 70,074.83

Intrinsic Value

Enterprise Value 75,313.63
Net Debt -307.90
Equity Value 75,621.53
Shares Outstanding 5.33
Equity Value Per Share 14,179.92