Corporate Finance
Hess Uni Köln
Hess Uni Köln
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Flashcards
DDM model general
P(0)= (D1+P1)/(1+KL)
--> P0= (SUM) Dt/(1+KL)
DDM Zero growth
P0= D0/KL
DDM Constant Growth
P0 = D1/(KL-g) = D0*(1+g)/(KL-g)
DDM TWO Phase
P0 = (SUM) Dt / (1+KL)t + (Dt*(1+g))/ [(1+KL)t * (KL-g)]
CAPM
k L = rf +(mü M -rf)*B L
k U= rf +(mü M - rf)*B U
Modigliani Miller
k L = re L = re U + (re U - rf)*(1-s)*L
Beta U= (1 / (1+(1-s)*L) )* Beta L
Growth Rate (2)
g = (1-p) * ROE
g= (PM*(1-p)*(1+L))/(TAT- PM*(1-p)*(1+L))
POS
EFN= (Asset/Sales) * ►Sales - (Liabilities/Sales) * ►Sales - (PM*Sales(forecast))*(1-p)
FCF and FTE (from EBIT)
FCF
EBIT
- Tax payments (on EBIT)
- Tax shield
---------------------------
= Net operative Earnings (less adj. taxes)
+ Depreceation
- CAPEX
- ►NWC (►CA - ►CL)
--------------------------------------
= Free Cash Flow
+ TS
--------------------------------------
= Total Cashflow (CFFO + CFFI + Interest)
- Interest payments
- Debt redemption / + New debts
---------------------------------------------------------
= FTE
FCF from CFFO
CFFO
+ interest payments
+ paid taxes (EBT*taxrate)
------------------------------------
CFFO before interest and taxes
+ CFFI
- EBIT * s
--------------------------------------------
= FCF
Earnings per Share
NI / Number of shares
Capital Structure ratios (3)
total Debt Ratio: (TA-TEQ) / TA
Debt to EQ ratio: (TA- TEQ) / TEQ
Equity multiplier: TA / TEQ
Coverage Ratios (2)
Interest Coverage Ratio: EBIT / Interest
Cash Coverage Ratio: EBITDA / Interest
Liquidity Ratio (5)
Current Ratio: Current Assets / Current Liabilities
Quick Ratio: (CA - Inventory) / Current liabilities
Cash Ratio: Cash / Current Liabilities
NWC to TA: NWC/ TA
Interval Measure: CA / (Cogs/365)
Turnoverratios (7)
Inventory Turnover: Cogs / Inventory
Days' SAles in Inventory: 365 / Inventory turnover
Receivables Turnover: Sales / Account Receivable
Days Sales in Receivables: 365 / Receivable Turnover
TA-Turnover: Sales / TA
NWC-Turnover Sales / NWC
FA-Turnover: Sales/ Net Fixed Assets
Profitable Ratios (3)
Profit Margin: NI / Sales
Return on Assets: EBIT / TA
Return on Equity: NI / TEQ
Market Value Ratios (3)
P/E Ratio: Price per share / Earnings per Share
PEG Ratio: P/E Ratio / future growth rate
Price to Book Ratio: Market value per share / Book value per share
APV model
EQ = Value of the firm + Value of TS - Debt
= (SUM) FCF / (1+kL)f + (SUM) (s*i*Debt) / (1+i)t
Tax shield
interest * s
APV Zero Growth
EQ0 = (FCF0 / k u) +((i * s * Debt0) / i )- Debt 0
APV Constant Growth
EQ0 = (FCF0*(1+g)) / (k u -g) + (s*i*Debt0) / (i - g) - Debt0
►NWC
►CA-►CL
WACC model (3)
WACC= k l * (EQ/EQ+Debt) + i*(1-s)*(Debt/Eq+Debt)
WACC= k u * (1-s*(debt/Eq+Debt)
k l = k u + (k u -i)*(1-s)*(Debt/EQ)
WACC zero growth
EQ = FCF*(1/WACC) -Debt
WACC Constant Growth
EQ= FCF ((1+g)/(WACC-g)) Debt
WACC Two Phase
EQ= (SUM) FCF(t)/(1+WACC)t +((FCF(T)*(1+g))/((1+WACC)T *(WACC-g) -debt
ROE
ROE= PM * TAT * EM
ROE= (NI/Sales) * (Sales/TA) * (TA/TE)
FTE from NI
NI
+Depr
- NWC
- Capex
- Debt Redemption
CFFO
= NI- Delta NWC + non cash op. expense
(meistens = NI - Delta NWC + Depr.)
CFFI
= -Capex -inv in non current assets
CFFF
Stocks issued - dividend payments+ new borrowings
Clean Surplus Assumption
EK (t) = EK (t-1) + NI (t) - Div (t)
FCF FTE from NI
NI
+ Depr.
+Interests
- Tax Shield
- Cap Ex
- Delta WC
= FCF
------------------------
+ tax shield
- interest
- debt redemption
= FTE
