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Discounted Cash Flow (DCF) Analysis Unlevered


Kroger Company (The)

Kroger Company (The) (KR)

Consumer Defensive

Operating Data

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 96,619.0098,377.47108,470.99109,837.73115,340.60122,664.73121,168.22125,905.89130,828.81135,944.22141,259.64
Revenue (%)
EBITDA 4,405.834,417.155,065.605,656.645,790.104,538.597,100.466,018.306,253.626,498.136,752.21
EBITDA (%)
EBIT 2,753.642,715.223,113.123,569.733,448.682,097.574,640.743,651.273,794.043,942.384,096.53
EBIT (%)
Depreciation 1,652.181,701.931,952.482,086.922,341.412,441.032,459.712,367.032,459.582,555.752,655.68
Depreciation (%)

Balance Sheet Data

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
Total Cash 241.55403.35271.18274.59322.95343.46424.09377.72392.49407.83423.78
Total Cash (%)
Account Receivables 1,053.151,111.671,269.111,735.441,649.371,631.441,587.301,624.191,687.691,753.681,822.25
Account Receivables (%)
Inventories 5,149.795,646.875,683.886,172.886,562.886,538.036,846.006,937.417,208.677,490.537,783.41
Inventories (%)
Accounts Payable 4,483.124,879.525,054.755,722.555,813.175,863.376,058.416,169.396,410.616,661.276,921.72
Accounts Payable (%)
Capital Expenditure -2,057.98-2,331.55-2,831.09-3,350.05-3,702.43-2,809.02-2,968.62-3,260.96-3,388.47-3,520.96-3,658.62
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 28.11
Diluted Shares Outstanding 810.00
Cost of Debt
Tax Rate 22.44
After-tax Cost of Debt -1.07
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.59
Total Debt 12,072.00
Total Equity 22,769.10
Total Capital 34,841.10
Debt Weighting 34.65
Equity Weighting 65.35
Wacc

Build Up Free Cash

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 96,619.0098,377.47108,470.99109,837.73115,340.60122,664.73121,168.22125,905.89130,828.81135,944.22141,259.64
EBITDA 4,405.834,417.155,065.605,656.645,790.104,538.597,100.466,018.306,253.626,498.136,752.21
EBIT 2,753.642,715.223,113.123,569.733,448.682,097.574,640.743,651.273,794.043,942.384,096.53
Tax Rate 34.66%33.08%34.30%33.88%32.64%-26.96%22.44%23.43%23.43%23.43%23.43%
EBIAT 1,799.301,816.922,045.422,360.142,323.042,663.163,599.182,795.612,904.923,018.503,136.53
Depreciation 1,652.181,701.931,952.482,086.922,341.412,441.032,459.712,367.032,459.582,555.752,655.68
Accounts Receivable --58.52-157.45-466.3386.0717.9344.14-36.88-63.51-65.99-68.57
Inventories --497.07-37.01-489.00-390.0024.85-307.97-91.41-271.25-281.86-292.88
Accounts Payable -396.40175.23667.8090.6250.21195.04110.98241.22250.65260.46
Capital Expenditure -273.56499.55518.96352.38-893.41159.60292.34127.50132.49137.67
UFCF 3,451.493,633.224,478.224,678.494,803.524,303.766,149.695,437.675,398.475,609.555,828.88
WACC
PV UFCF 4,812.234,494.394,393.344,294.56
SUM PV UFCF 36,858.64

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.30
Free cash flow (t + 1) 6,062.04
Terminal Value 263,566.92
Present Value of Terminal Value 194,188.98

Intrinsic Value

Enterprise Value 231,047.62
Net Debt 11,647.91
Equity Value 219,399.71
Shares Outstanding 810.00
Equity Value Per Share 270.86