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OVERVIEW - Adobe Inc.

EV - EQV BRIDGE

DISCOUNT RATES

Cost of equity Cost of debt Unlevered beta Tax rate Target D/E Ratio Market risk premium x Levered Beta Risk free rate + Spread over risk free rate Company risk premium + Risk free rate + CoE premium Cost of debt (pre-tax) x (1 - MRT) Marginal tax rate Cost of equity x Equity ratio + Cost of debt x Debt ratio WACC

SIMPLIFIED DISCOUNTED CASHFLOW WACC ('DCF WACC - simplified')

Cashflows

TY
Sales
EBIT
- Tax
NOPAT
+ Depreciation & Amortisation
- Capex
+/- Change in Net Working Capital
Free Cashflow
 
Time
Discount Factor ({{discountRates.wacc()|percent:1}} WACC)
Discounted Free Cashflow

Values

Present value of Discounted Free Cashflows
Present value of Terminal Value ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Enterprise Value
Net Debt
Equity Value

Sensitivities

Perpetual growth rate ('g')
Weighted Average Cost of Capital ('WACC')

DISCOUNTED CASHFLOW WACC (DCF WACC)

Cashflows

TY
Sales
EBIT
- Tax
NOPAT
+ Depreciation & Amortisation
- Capex
+/- Change in Net Working Capital
Free Cashflow
 
Debt
Enterprise value at time t (WACC-based) WACC
Debt ratio (Debt / Capital)
Target leverage (D / E)
 
Cost of equity
Risk free rate
Beta unlevered
Tax rate
Target D/E ratio
Beta relevered
Market risk premium
Cost of Equity Premium
Cost of equity
 
Cost of debt
Risk free rate
Spread
Pre-tax cost of debt
Tax rate
Cost of debt
 
WACC
Cost of equity
Cost of debt (post tax)
Debt ratio (Debt / Capital)
WACC (post tax)
WACC (pre tax)
 
 
Time
Discount factor
Discounted Free Cashflow

Values

Present value of Discounted Free Cashflows
Present value of Terminal Value ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Enterprise Value
Net Debt
Equity Value

Sensitivities

Perpetual Growth Rate

ADJUSTED PRESENT VALUE ('DCF APV')

Cashflows

TY
Free Cashflow
Time
Discount Factor ({{apv.cost_of_equity()|percent:1}} CoE)
Discounted Free Cashflow
Present value of Discounted Free Cashflow
Present value of Terminal Value ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Unlevered Enterprise value
Debt
Debt / EBITDA
Interest rate
Interest expense
Tax rate
Tax shield on interest
 
Time
Discount Factor ({{apv.cost_of_equity()|percent:1}} CoE)
Discounted Tax shield

Values

Present value of Discounted Free Cashflow
Present value of Terminal Value ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Value of tax shield
 
Enterprise value
Net Debt
Equity Value

Sensitivities

Perpetual growth rate ('g')
Cost of Equity ('CoE')

SIMPLIFIED FLOW-TO-EQUITY

Cashflows

TY
Net income
 
- Capex
+ Depreciation & Amortization
+/- Change in Net Working Capital
Sub-total
 
Free Cashflow to Equity (FCFE)
 
Time
Discount Factor ({{equityApproach.cost_of_equity()|percent:1}} CoE)
Discounted FCFE

Values

Present value of discounted FCFEs in forecast period
Present value of perpetual FCFEs ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Equity Value
Net Debt
Enterprise value

Sensitivities

Perpetual growth rate ('g')
Cost of Equity

DIVIDEND DISCOUNT MODEL ('DDM')

Cashflows

TY
Net income
Dividend
 
Time
Discount Factor ({{discountRates.cost_of_equity()|percent:1}} CoE)
Discounted Dividend

Values

Present value of discounted dividends in forecast period
Present value of Terminal Value ({{settings.percentage_of_terminal_value_included|percent:0}} included)
Equity Value
Net Debt
Enterprise value

Sensitivities

Perpetual growth rate ('g')
Cost of Equity

TRADING MULTIPLES - EV/SALES 2022

Median Multiple
Applied Multiple

TRADING MULTIPLES - EV/SALES 2023

Median Multiple
Applied Multiple

TRADING MULTIPLES - EV/EBITDA 2022

Median Multiple
Applied Multiple

TRADING MULTIPLES - EV/EBITDA 2023

Median Multiple
Applied Multiple

TRADING MULTIPLES - EV/EBIT 2022

Median Multiple
Applied Multiple

TRADING MULTIPLES - EV/EBIT 2023

Median Multiple
Applied Multiple

TRADING MULTIPLES - P/E 2022

Median Multiple
Applied Multiple

TRADING MULTIPLES - P/E 2023

Median Multiple
Applied Multiple

TRANSACTION MULTIPLES - EV/SALES

Median Multiple
Applied Multiple

TRANSACTION MULTIPLES - EV/EBITDA

Median Multiple
Applied Multiple

TRANSACTION MULTIPLES - EV/EBIT

Median Multiple
Applied Multiple

TRANSACTION MULTIPLES - P/E

Median Multiple
Applied Multiple

LEVERAGED BUYOUT ('LBO')

Financing Mix

% xEBIT xEBITDA
Debt
Equity
Total sources of funds

Cashflows

EBITDA
EBIT
+/- Net interest (expense)/income
EBT
- Tax
Net income
+ Depreciation & Amortisation
+/- Change in Net Working Capital
Cashflow from Operations
Cashflow from Investments
Cashflow from Financing
Net Cashflow
 
Debt, bop
+/- Issuance/(Paydown)
Debt, eop
Interest expense
 
Cash, bop
+/- Net Cashflow
Cash, eop
Interest income

Credit metrics

Debt / EBITDA
Net debt / EBITDA
EBITDA / Interest expense n/m
(EBITDA - Capex) / Interest expense
EBITDA / net interest expense

Exit Calculations

EV (@{{settings.exit_ev}}x EBIT) - exit
- Net debt
EqV - exit
 
Implied Entry Eqv ({{settings.irr_requirement | percent}} IRR)
+ Acquisition Debt
Implied Entry EV
- Net debt @ Acquisition
Implied Purchase Price (EqV)
 
Exit EV
Exit EqV
Implied IRR

Sensitivities

IRR requirement
Leverage