Discounted Cash Flow (DCF) Analysis Unlevered

Microsoft Corporation (MSFT)

$208.9

0.2 (+0.10%)

Operating Data

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	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	143,022.34	156,223.30	170,642.71	186,393.03
Revenue (%)
EBITDA	31,233.02	33,630.33	25,247.80	31,357.65	38,435.11	49,463.76	58,052.09	68,421.89	62,254.98	68,001.12	74,277.62
EBITDA (%)
EBIT	27,480.70	28,420.37	19,286.77	24,739.73	29,656.84	39,200.20	46,373.72	55,621.39	50,335.15	54,981.08	60,055.83
EBIT (%)
Depreciation	3,752.32	5,209.97	5,961.03	6,617.92	8,778.27	10,263.57	11,678.37	12,800.50	11,919.84	13,020.04	14,221.79
Depreciation (%)

Balance Sheet Data

Year A/P	2013 Projected	2014 Projected	2015 Projected	2016 Projected	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected	2022 Projected	2023 Projected
Total Cash	76,774.68	85,460.82	96,284.13	113,170.13	132,881.19	133,647.07	133,823.10	136,529.12	172,736.10	188,679.64	206,094.77
Total Cash (%)
Account Receivables	17,484.89	19,546.06	17,911.15	18,276.77	22,433.36	26,475.58	29,523.13	32,008.40	34,603.46	37,797.36	41,286.06
Account Receivables (%)
Inventories	1,938.44	2,657.08	2,900.97	2,251.55	2,182.50	2,659.70	2,063.85	1,887.89	3,655.63	3,993.04	4,361.60
Inventories (%)
Accounts Payable	4,826.64	7,432.89	6,588.01	6,900.51	7,387.65	8,619.19	9,388.00	12,528.76	11,919.84	13,020.04	14,221.79
Accounts Payable (%)
Capital Expenditure	-4,258.34	-5,487.83	-5,942.31	-8,340.77	-8,131.25	-11,632.04	-13,930.99	-15,446.41	-13,294.60	-14,521.69	-15,862.05
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 208.9
Diluted Shares Outstanding	7,683.00
Cost of Debt
Tax Rate	16.51
After-tax Cost of Debt	4.17%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.259
Total Debt	72,823.00
Total Equity	1,604,978.70
Total Capital	1,673,512.70
Debt Weighting	4.10
Equity Weighting	95.90
Wacc

Build Up Free Cash

Year A/P	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	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	143,022.34	156,223.30	170,642.71	186,393.03
EBITDA	31,233.02	33,630.33	25,247.80	31,357.65	38,435.11	49,463.76	58,052.09	68,421.89	62,254.98	68,001.12	74,277.62
EBIT	27,480.70	28,420.37	19,286.77	24,739.73	29,656.84	39,200.20	46,373.72	55,621.39	50,335.15	54,981.08	60,055.83
Tax Rate	19.18%	20.65%	34.12%	19.89%	14.76%	54.57%	10.18%	16.51%	23.73%	23.73%	23.73%
EBIAT	22,209.47	22,550.37	12,706.74	19,818.61	25,280.87	17,809.58	41,652.28	46,439.60	38,389.60	41,932.96	45,803.38
Depreciation	3,752.32	5,209.97	5,961.03	6,617.92	8,778.27	10,263.57	11,678.37	12,800.50	11,919.84	13,020.04	14,221.79
Accounts Receivable	-	-2,061.17	1,634.91	-365.62	-4,156.59	-4,042.23	-3,047.55	-2,485.27	-2,595.06	-3,193.90	-3,488.70
Inventories	-	-718.64	-243.89	649.42	69.06	-477.20	595.85	175.96	-1,767.73	-337.41	-368.56
Accounts Payable	-	2,606.25	-844.88	312.50	487.15	1,231.53	768.82	3,140.75	-608.92	1,100.20	1,201.75
Capital Expenditure	-	1,229.49	454.48	2,398.46	-209.52	3,500.79	2,298.95	1,515.42	-2,151.81	1,227.09	1,340.35
UFCF	25,961.79	28,816.26	19,668.39	29,431.29	30,249.23	28,286.04	53,946.72	61,586.96	43,185.92	53,748.98	58,710.01
WACC
PV UFCF									38,582.97	42,901.97	41,867.08
SUM PV UFCF											210,152.82

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.93
Free cash flow (t + 1)	61,058.41
Terminal Value	769,967.37
Present Value of Terminal Value	438,268.04

Intrinsic Value

Enterprise Value	648,420.86
Net Debt	59,247.00
Equity Value	589,173.86
Shares Outstanding	7,683.00
Equity Value Per Share	76.69

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