BusinessValuation - The Free Cash Flow Business Valuation...

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The Free Cash Flow Business Valuation Model The Discounted Free Cash Flow Model for a Complete Business Pie In the Sky Company Forecasting Variables: 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenue growth factor 20% 30% 40% 50% 60% 50% 40% 30% 20% 10% Expected gross profit margin 50% 51% 52% 53% 54% 55% 56% 57% 58% 59% 50% 40% 30% 29% 28% 27% 26% 25% 24% 23% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Capital expenditure growth factor 40% 35% 30% 25% 20% -10% -15% -20% -25% -30% Net working capital to sales ratio 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% Income tax rate 40% 40% Assumed long-term sustainable growth rate 5% per year after 2011 5% Discount rate 20% 20% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Valuation Model Outputs: Gross profit margin 50% 51% 52% 53% 54% 55% 56% 57% 58% 59% Net operating profit margin -10% 1% 12% 10% 10% 11% 12% 13% 14% 16% Free cash flow ($ mil) ($1.3) ($1.4) ($1.3) ($1.4) ($1.0) $0.7 $2.8
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BusinessValuation - The Free Cash Flow Business Valuation...

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