This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/equity-analysis-excel-model-416 This is a Equity Analysis Model in Excel. This Tool is very helpful in the development of a Business Case.

1. CAPITAL BUDGETING WORKSHEET
5
Equity Analysis of a Project
INPUT SHEET: USER ENTERS ALL BOLD NUMBERS IN YELLOW CELLS
INITIAL INVESTMENT
CASHFLOW DETAILS
Initial Investment=
Opportunity cost (if any)=
Lifetime of the investment
Salvage Value at end of project=
Deprec. method(1:St.line;2:DDB)=
Revenues in year 1=
$100,000
Var. Expenses as % of Rev=
$5,000
DISCOUNT RATE
Approach(1:Direct;2:CAPM)=
$65,000
1
1. Discount rate =
13%
10
Fixed expenses in year 1=
$15,000
$50,000
Tax rate on net income=
33%
2a. Beta=
b. Riskless rate=
3%
0.6
5.00%
Other invest.(non-depreciable)=
1
If you do not have the breakdown of fixed and variable
c. Market risk premium =
5.50%
10%
expenses, input the entire expense as a % of revenues.
d. Debt Ratio =
12.00%
e. Cost of Borrowing =
12.00%
Discount rate used=
Tax Credit (if any )=
3.00%
0
WORKING CAPITAL
Initial Investment in Work. Cap=
$10,000
Working Capital as % of Rev=
10%
Salvageable fraction at end=
100%
GROWTH RATES
1
2
3
4
5
6
7
8
9
10
Revenues
Do not enter
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
Fixed Expenses
Do not enter
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
5.00%
4
5
6
7
8
9
10
Default: The fixed expense growth rate is set equal to the growth rate in revenues by default.
YEAR
0
1
2
3
INITIAL INVESTMENT
Investment
- Tax Credit
Net Investment
+ Working Cap
+ Opp. Cost
+ Other invest.
Initial Investment
$100,000
$10,000
$90,000
$10,000
$5,000
$0
$105,000
Equipment
Working Capital
Lifetime Index
Revenues
-Var. Expenses
- Fixed Expenses
EBITDA
- Depreciation
EBIT
-Tax
EBIT(1-t)
+ Depreciation
- ∂ Work. Cap
NATCF
Discount Factor
Discounted CF
$0
$0
($105,000)
1
($105,000)
1
$65,000
$8,450
$15,000
$41,550
$5,000
$36,550
$12,062
$24,489
$5,000
($3,500)
$32,989
1.03
$32,028
$0
$0
1
$68,250
$8,873
$15,750
$43,628
$5,000
$38,628
$12,747
$25,880
$5,000
($3,175)
$34,055
1.0609
$32,101
SALVAGE VALUE
$0
$0
$0
$0
$0
$0
$0
$0
OPERATING CASHFLOWS
1
1
1
1
$71,663
$75,246
$79,008
$82,958
$9,316
$9,782
$10,271
$10,785
$16,538
$17,364
$18,233
$19,144
$45,809
$48,099
$50,504
$53,029
$5,000
$5,000
$5,000
$5,000
$40,809
$43,099
$45,504
$48,029
$13,467
$14,223
$15,016
$15,850
$27,342
$28,877
$30,488
$32,180
$5,000
$5,000
$5,000
$5,000
$3,841
$358
$376
$395
$28,501
$33,518
$35,112
$36,785
1.092727 1.12550881 1.159274074 1.194052297
$26,082
$29,781
$30,288
$30,807
$0
$0
1
$87,106
$11,324
$20,101
$55,681
$5,000
$50,681
$16,725
$33,956
$5,000
$415
$38,541
1.229873865
$31,338
$0
$0
$0
$0
$50,000
$10,084
1
1
1
$91,462
$96,035
$100,836
$11,890
$12,484
$13,109
$21,107
$22,162
$23,270
$58,465
$61,388
$64,458
$5,000
$5,000
$5,000
$53,465
$56,388
$59,458
$17,643
$18,608
$19,621
$35,822
$37,780
$39,837
$5,000
$5,000
$5,000
$436
$457
$480
$40,386
$42,323
$44,356
1.266770081 1.304773184 1.343916379
$31,881
$32,437
$77,713
Investment Measures
NPV =
$249,454
IRR =
30.20%
ROC =
40.86%
Book Value (beginning)
Depreciation
BV(ending)
$100,000
$100,000
$5,000
$95,000
$95,000
$5,000
$90,000
BOOK VALUE & DEPRECIATION
$90,000
$85,000
$80,000
$5,000
$5,000
$5,000
$85,000
$80,000
$75,000
$75,000
$5,000
$70,000
$70,000
$5,000
$65,000
$65,000
$5,000
$60,000
$60,000
$5,000
$55,000
$55,000
$5,000
$50,000