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Discounted Cash Flow (DCF) Analysis Unlevered


Xerox Corporation

Xerox Corporation (XRX)

Technology

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 20,006.0012,679.8011,466.3510,772.6310,266.329,831.038,627.717,571.686,644.905,831.575,117.78
Revenue (%)
EBITDA 2,770.831,849.981,231.49154.051,203.211,144.33919.71807.14708.35621.65545.56
EBITDA (%)
EBIT 1,412.421,210.92640.97-409.36676.55618.37449.50394.48346.20303.82266.64
EBIT (%)
Depreciation 1,358.41639.06590.52563.41526.66525.96470.21412.66362.15317.82278.92
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 1,764.531,411.261,228.052,223.471,292.531,084.361,077.60945.70829.95728.36639.21
Total Cash (%)
Account Receivables 7,458.246,905.425,055.514,705.495,108.524,748.393,991.183,502.663,073.932,697.682,367.49
Account Receivables (%)
Inventories 998.30934.50901.25841.34914.73817.94650.53570.90501.03439.70385.88
Inventories (%)
Accounts Payable 1,626.491,583.711,341.561,125.741,107.741,091.24930.07816.23716.32628.64551.70
Accounts Payable (%)
Capital Expenditure -340.10-122.99-56.19-137.89-104.72-90.45-91.45-80.26-70.44-61.81-54.25
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 36.49
Diluted Shares Outstanding 238.28
Cost of Debt
Tax Rate 41.59
After-tax Cost of Debt -2.03
Risk-Free Rate
Market Risk Premium
Cost of Equity 16.29
Total Debt 4,269.00
Total Equity 8,694.94
Total Capital 12,963.94
Debt Weighting 32.93
Equity Weighting 67.07
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 20,006.0012,679.8011,466.3510,772.6310,266.329,831.038,627.717,571.686,644.905,831.575,117.78
EBITDA 2,770.831,849.981,231.49154.051,203.211,144.33919.71807.14708.35621.65545.56
EBIT 1,412.421,210.92640.97-409.36676.55618.37449.50394.48346.20303.82266.64
Tax Rate 17.92%16.35%30.11%-15.16%71.15%41.59%26.99%26.99%26.99%26.99%26.99%
EBIAT 1,159.351,012.93447.98-471.41195.16361.22328.17288.00252.75221.81194.66
Depreciation 1,358.41639.06590.52563.41526.66525.96470.21412.66362.15317.82278.92
Accounts Receivable -552.821,849.91350.03-403.03360.13757.21488.52428.73376.25330.20
Inventories -63.8033.2559.91-73.3996.79167.4179.6269.8861.3353.82
Accounts Payable --42.78-242.14-215.82-18.00-16.49-161.18-113.84-99.91-87.68-76.95
Capital Expenditure --217.11-66.8181.70-33.17-14.271.01-11.19-9.82-8.62-7.57
UFCF 2,517.762,008.722,612.70367.81194.221,313.341,562.831,143.771,003.77880.91773.09
WACC
PV UFCF 1,396.88913.76716.77562.24441.03
SUM PV UFCF 8,791.31

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 11.88
Free cash flow (t + 1) 804.01
Terminal Value 10,203.17
Present Value of Terminal Value 5,820.67

Intrinsic Value

Enterprise Value 14,611.98
Net Debt 3,184.64
Equity Value 11,427.34
Shares Outstanding 238.28
Equity Value Per Share 47.96