Financial Modelling Workshop

Last Modified:
Legend

6/30/2016
Hardcode
Linked

Input
Key Data

Formula
Comments

Dashboard
Case Selector:
Acquistion Price

2,267,250

VALUATION SUMMARY
DCF - Unlevered
DCF - Levered
Comps - EV/EBITDA (2015E)
Comps - EV/EBITDA (2015E)

$
$
$
$

3,346,764
3,133,000
1,494,833 $
2,255,637 $

Base

Exit year:

Low
2,074,146
2,706,764

Exit EBITDA multiple:

Entry EBITDA multiple

12.0x
12.0x

High
8.0x
15.0x

11.0x
18.0x

<-- Bloomberg RV fn
<-- Bloomberg RV fn

Valuation Summary
Comps - EV/EBITDA (2015E)

$2,255,637

Comps - EV/EBITDA (2015E)

$1,494,833

2706764.0865

2074145.83333333

DCF - Levered

$3,133,000

DCF - Unlevered

$3,346,764

$-

RETURNS
Year
(SGD, Year Ending)
Acquisiton price
Distribution/dividends
Exit
Net Cashflow
Running yield
IRR
CoC Multiple
Average Yield

$1,000,000

0
1-Jan-15
(2,267,250)

(2,267,250)

12.68%
1.7x
7.66%

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

1
Dec-15

2
Dec-16

3
Dec-17

4
Dec-18

5
Dec-19

6
Dec-20

7
Dec-21

8
Dec-22

9
Dec-23

10
Dec-24

160,376
160,376
7.1%

171,344
171,344
7.6%

182,902
182,902
8.1%

195,081
195,081
8.6%

158,711
3,004,502
3,163,213
7.0%

Unlevered

VALUATION OF AN ICE CREAM PARLOUR

Revenue
Price
Ice cream
Waffles
Cakes
Quantity
Customers
Average Purchase:
Ice cream
Waffles
Cakes
COSTS
COGS
Ice cream
Waffles
Cakes

%
%
date

2.00%
2.50%
1-Jan-15

/scoop
/piece
/slice

$3.00
$5.00
$5.00

/day
/customer

D&A
Useful Life

years

Tax
Tax Rate

SCENARIO ANALYSIS
Case Selector

<-- Menu

3,133,000

Risk-free rate (Rf)

Beta (B)
Market Return (Rm)
CoE

%
%
%

3.00%
1.00
5.36%
5.36%

CoD

3.86%

%
%
%

58%
42%
4.46%

<-- SGD govt bond yield, duration matched to holding period

<-- Bloomberg, Ibbottson, BARRA
<-- STI (xirr)

<-- Menu

WACC
Equity weightage
Debt Weightage
WACC

<-- Menu

<-- Historical analysis

3.00
$2,000
$2,000
$10,000

EXIT
Terminal Value
Method

<-- Historical analysis

<-- Historical analysis

Terminal Multiple Growth

Gordon Growth
Growth Rate

2.00%

Terminal Multiple
EBITA Multiple

8.0x

<-- LT Growth rate

<-- Cost of tubs/# of scoops

<-- Cost of mixture/# of waffles
<-- Cost of cake/# of slices

<--Trading comparable to other fb coy

<-- Current staffing level

<-- Current salary
<-- Historical analysis
<-- current rental contract

10

<-- Bsed on Singapore GAAP

17%

<-- Bsed on Singapore GAAP

Base

GENERAL
Population growth rate
Inflation rate

%
%

Revenue
Price
Ice cream
Waffles
Cakes

/scoop
/piece
/slice

/day
/customer

Selected
2.00%
2.50%

LOW
1.00%
2.00%

BASE
2.00%
2.50%

HIGH
3.00%
3.00%

$3.00
$5.00
$5.00

$2.00
$4.00
$4.50

$3.00
$5.00
$5.00

$4.00
$6.00
$5.50

200

150

200

250

1.00
0.50
0.25

0.75
0.25
0.10

1.00
0.50
0.25

1.25
0.75
0.40

/scoop
/piece
/slice

$0.50
0.67
$1.25

$0.75
0.80
$1.50

$0.50
0.67
$1.25

$0.25
0.50
$1.00

/person
/month
/month
/month

3
$2,000
$2,000
$10,000

4
$2,200
$2,500
$11,000

3
$2,000
$2,000
$10,000

2
$1,800
$1,500
$9,000

/day
/month

Base Value
200
$10,000

Increment
20
$1,000

%
%

Base Value
5.36%
3.86%

Increment
0.50%
0.50%
CoD

Equity Value (Unlevered)

CoE
CoD

<-- Client

1.00
0.50
0.25

/person
/month
/month
/month

SENSITIVTY ANALYSIS
Equity Value (Levered)
Customers
Rent

<-- CPI/Govt

<-- Historical analysis

SG&A
# of Staff
Average Salary
Utilities
Rent

SG&A
# of Staff
Average Salary
Utilities
Rent

<-- White Paper

200

$0.50
0.67
$1.25

COSTS
COGS
Ice cream
Waffles
Cakes

Levered

CoE

/scoop
/piece
/slice

Quantity
Customers
Average Purchase:
Ice cream
Waffles
Cakes

3,346,764

WACC
CoE

Rent/Month

ASSUMPTIONS
GENERAL
Population growth rate
Inflation rate
Valuation rate

Customer / Day
200

3,133,000
$12,000
$11,000
$10,000
$9,000
$8,000

160

180

220

240

3,346,764
4.86%
4.36%
3.86%
3.36%
2.86%

6.36%

5.86%

CoE
5.36%

4.86%

4.36%

LOW
#VALUE!
#VALUE!
#VALUE!
#VALUE!
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#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!

HIGH
LAGNITUDE
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!

TORNADO CHART
LOW
1.00%
2.00%
$2.00
$4.00
$4.50
150.00
0.75
0.25
0.10
0.75
0.80
1.50
4.00
2,200.00
2,500.00
11,000.00
6.36%
4.86%
1.00%
7.0x

GENERAL-Population growth rate

GENERAL-Inflation rate
REVENUE/PRICE - Ice cream
REVENUE/PRICE - Waffles
REVENUE/PRICE - Cakes
REVENUE/QUANTITY - Customers
REVENUE/QUANTITY - Ice cream
REVENUE/QUANTITY - Waffles
REVENUE/QUANTITY - Cakes
COST/COGS - Ice cream
COST/COGS - Waffles
COST/COGS - Cakes
COST/SG&A - # of Staff
COST/SG&A - Average Salary
COST/SG&A - Utilities
COST/SG&A - Rent
DISCOUNT RATE - CoE
DISCOUNT RATE - CoD
EXIT - Gordon Growth Rate
EXIT - Exit Multiple
###
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###
###

GENERAL-Population growth rate

GENERAL-Inflation rate
REVENUE/PRICE - Ice cream
REVENUE/PRICE - Waffles
REVENUE/PRICE - Cakes
REVENUE/QUANTITY - Customers
REVENUE/QUANTITY - Ice cream
REVENUE/QUANTITY - Waffles
REVENUE/QUANTITY - Cakes
COST/COGS - Ice cream
COST/COGS - Waffles
COST/COGS - Cakes
COST/SG&A - # of Staff
COST/SG&A - Average Salary
COST/SG&A - Utilities
COST/SG&A - Rent
DISCOUNT RATE - CoE
DISCOUNT RATE - CoD
EXIT - Gordon Growth Rate
EXIT - Exit Multiple

LOW
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!

BASE
2.00%
2.50%
$3.00
$5.00
$5.00
200.00
1.00
0.50
0.25
0.50
0.67
1.25
3.00
2,000.00
2,000.00
10,000.00
5.36%
3.86%
2.00%
8.0x

HIGH
3.00%
3.00%
$4.00
$6.00
$5.50
250.00
1.25
0.75
0.40
0.25
0.50
1.00
2.00
1,800.00
1,500.00
9,000.00
4.36%
2.86%
3.00%
9.0x

LOW

HIGH
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!
#VALUE!

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

2,938,283
3,233,059
2,200,884
2,773,824
3,203,529
1,741,338
2,630,589
2,105,394
2,702,206
3,060,294
3,270,372
3,275,147
3,016,346
3,247,639
3,264,160
3,181,555
3,201,673
3,259,915
6,958,235
3,126,403

HIGH
3,784,656
3,464,504
4,492,644
3,919,704
3,489,999
4,952,190
4,062,939
4,588,134
3,991,322
3,633,234
3,442,254
3,418,382
3,677,183
3,445,890
3,429,369
3,511,973
3,499,466
3,435,996
14,583,522
3,567,125

#N/A
#N/A
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#N/A
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#N/A
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#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A

Impact on Equity Value(Unlevered)

#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
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#N/A
-

10

12

Days in Year
Year
Debt (SGD,Year Ending)
Base Rate
Margin
Tenor
Amortization Rate
All-in rate
Beginning Balance
Less: Repayments
Ending Balnce
Interest Expense

365.00
366.00
365.00
1
2
3
Dec-15
Dec-16
Dec-17
0.86%
<-- ABS
300 bps
<-- Loan agreement
5 years
<-- Loan agreement
Bullet
<-- Loan agreement

365.00
4
Dec-18

365.00
5
Dec-19

366.00
6
Dec-20

365.00
7
Dec-21

365.00
8
Dec-22

365.00
9
Dec-23

366.00
10
Dec-24

3.86%
50,000
50,000

50,000
50,000

50,000
50,000

50,000
50,000

50,000
(50,000)
-

1,929

1,929

1,929

1,929

964

Days in Year
Year
P&L (SGD,Year Ending)
Price(per unit)
Ice cream
Waffles
Cakes

365.00
1
Dec-15
$3.00 $
$5.00 $
$5.00 $

366.00
2
Dec-16
3.08 $
5.13 $
5.13 $

365.00
3
Dec-17
3.15 $
5.25 $
5.25 $

365.00
4
Dec-18
3.23 $
5.38 $
5.38 $

365.00
5
Dec-19
3.31 $
5.52 $
5.52 $

366.00
6
Dec-20
3.39 $
5.66 $
5.66 $

365.00
7
Dec-21
3.48 $
5.80 $
5.80 $

365.00
8
Dec-22
3.57 $
5.94 $
5.94 $

365.00
9
Dec-23
3.66 $
6.09 $
6.09 $

366.00
10
Dec-24
3.75
6.24
6.24

Quantity
Customers
Ice cream
Waffles
Cakes

73,000
73,000
36,500
18,250

74,460
74,460
37,230
18,615

75,949
75,949
37,975
18,987

77,468
77,468
38,734
19,367

79,018
79,018
39,509
19,754

80,598
80,598
40,299
20,149

82,210
82,210
41,105
20,552

83,854
83,854
41,927
20,964

85,531
85,531
42,766
21,383

87,242
87,242
43,621
21,810

Revenue
Ice cream
Waffles
Cakes

492,750
219,000
182,500
91,250

515,170
228,965
190,804
95,402

538,610
239,382
199,485
99,743

563,117
250,274
208,562
104,281

588,739
261,662
218,051
109,026

615,527
273,567
227,973
113,986

643,533
286,015
238,346
119,173

672,814
299,028
249,190
124,595

703,427
312,634
260,528
130,264

735,433
326,859
272,383
136,191

Less: COGS
Ice cream
Waffles
Cakes

(83,646)
(36,500)
(24,333)
(22,813)

(87,452)
(38,161)
(25,441)
(23,850)

(91,431)
(39,897)
(26,598)
(24,936)

(95,591)
(41,712)
(27,808)
(26,070)

(99,940)
(43,610)
(29,074)
(27,256)

(104,488)
(45,595)
(30,396)
(28,497)

(109,242)
(47,669)
(31,779)
(29,793)

(114,212)
(49,838)
(33,225)
(31,149)

(119,409)
(52,106)
(34,737)
(32,566)

(124,842)
(54,477)
(36,318)
(34,048)

Gross Profit
Ice cream
Waffles
Cakes

409,104
182,500
158,167
68,438

427,718
190,804
165,363
71,551

447,180
199,485
172,887
74,807

467,526
208,562
180,754
78,211

488,799
218,051
188,978
81,769

511,039
227,973
197,576
85,490

534,291
238,346
206,566
89,380

558,602
249,190
215,965
93,446

584,018
260,528
225,791
97,698

610,591
272,383
236,065
102,143

(216,000)
(72,000)
(24,000)
(120,000)

(221,400)
(73,800)
(24,600)
(123,000)

(226,935)
(75,645)
(25,215)
(126,075)

(232,608)
(77,536)
(25,845)
(129,227)

(238,424)
(79,475)
(26,492)
(132,458)

(244,384)
(81,461)
(27,154)
(135,769)

(250,494)
(83,498)
(27,833)
(139,163)

(256,756)
(85,585)
(28,528)
(142,642)

(263,175)
(87,725)
(29,242)
(146,208)

(269,754)
(89,918)
(29,973)
(149,864)

EBITDA

193,104

206,318

220,245

234,918

250,375

266,655

283,798

301,845

320,843

340,836

Less: D&A

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

(10,000)

EBIT

183,104

196,318

210,245

224,918

240,375

256,655

273,798

291,845

310,843

330,836

(1,929)

(1,929)

(1,929)

(1,929)

(964)

EBT

181,176

194,390

208,316

222,989

239,411

256,655

273,798

291,845

310,843

330,836

Less:Taxes

(30,800)

(33,046)

(35,414)

(37,908)

(40,700)

(43,631)

(46,546)

(49,614)

(52,843)

(56,242)

Net Profit

150,376

161,344

172,902

185,081

198,711

213,024

227,252

242,232

258,000

274,594

Less:SG&A
Staff
Utilities
Rent

Less: Interest Expense

Days in Year
Year
Debt (SGD,Year Ending)
Cash
Inventory
Net PP&E
Total Assets

365.00
0
Dec-14
20,000
100,000
120,000

365.00
1
Dec-15
160,376
20,000
90,000
270,376

366.00
2
Dec-16
331,719
20,000
80,000
431,719

365.00
3
Dec-17
514,622
20,000
70,000
604,622

365.00
4
Dec-18
709,703
20,000
60,000
789,703

365.00
5
Dec-19
868,414
20,000
50,000
938,414

366.00
6
Dec-20
1,091,437
20,000
40,000
1,151,437

365.00
7
Dec-21
1,328,689
20,000
30,000
1,378,689

365.00
8
Dec-22
1,580,921
20,000
20,000
1,620,921

365.00
9
Dec-23
1,848,921
20,000
10,000
1,878,921

366.00
10
Dec-24
2,033,515
20,000
100,000
2,153,515

Debt
Total Liabilities

50,000
50,000

50,000
50,000

50,000
50,000

50,000
50,000

50,000
50,000

Shareholder Equity
Retained Earnings
Total Equity

70,000
70,000

70,000
150,376
220,376

70,000
311,719
381,719

70,000
484,622
554,622

70,000
669,703
739,703

70,000
868,414
938,414

70,000
1,081,437
1,151,437

70,000
1,308,689
1,378,689

70,000
1,550,921
1,620,921

70,000
1,808,921
1,878,921

70,000
2,083,515
2,153,515

OK

OK

OK

OK

OK

OK

OK

OK

OK

Check

OK

OK

Days in Year
Year
CF (SGD,Year Ending)
EBITDA
Less: Taxes
Less: Interest expenses
Cashflow from operations

365.00
1
Dec-15
193,104
(1,929)
(30,800)
160,376

366.00
2
Dec-16
206,318
(1,929)
(33,046)
171,344

365.00
3
Dec-17
220,245
(1,929)
(35,414)
182,902

365.00
4
Dec-18
234,918
(1,929)
(37,908)
195,081

365.00
5
Dec-19
250,375
(964)
(40,700)
208,711

366.00
6
Dec-20
266,655
(43,631)
223,024

365.00
7
Dec-21
283,798
(46,546)
237,252

365.00
8
Dec-22
301,845
(49,614)
252,232

365.00
9
Dec-23
320,843
(52,843)
268,000

366.00
10
Dec-24
340,836
(56,242)
284,594

Capital expenditure
Cashflow from investors

(100,000)
(100,000)

Principal repayments
Cashflow from Financing

(50,000)
(50,000)

160,376

171,344

182,902

195,081

158,711

223,024

237,252

252,232

268,000

184,594

Net CF

Days in Year
Year
Valuation (SGD,Year Ending)
Unlevered Valuation
EBIT
Less: Cash Taxes
Add: D&A
Less: Capex
FCFF (Free CF to Firm)
Year Adjustment Factor
Discount Rate
Discounted FCFF
Sum of FCFF
Discounted TV
Enterprise Value
Less: Net Debt
Equity Value
Levered Valuation
FCFF (Free CF to Firm)
Year Adjustment Factor
Discount Rate
Discounted FCFE
Sum of FCFF
Discounted TV
Equity Value

365.00
1
Dec-15

366.00
2
Dec-16

365.00
3
Dec-17

365.00
4
Dec-18

365.00
5
Dec-19

366.00
6
Dec-20

365.00
7
Dec-21

365.00
8
Dec-22

365.00
9
Dec-23

366.00
10
Dec-24

183,104
(31,128)
10,000
161,976
1.00
0.96
155,064

196,318
(33,374)
10,000
172,944
2.00
0.92
158,498

210,245
(35,742)
10,000
184,503
3.00
0.88
161,875

224,918
(38,236)
10,000
196,682
4.00
0.84
165,196

240,375
(40,864)
10,000
209,511
5.00
0.80
168,462

256,655
(43,631)
10,000
223,024
6.00
0.77
171,674

273,798
(46,546)
10,000
237,252
7.00
0.74
174,832

291,845
(49,614)
10,000
252,232
8.00
0.71
177,939

310,843
(52,843)
10,000
268,000
9.00
0.68
180,994

330,836
(56,242)
10,000
(100,000)
184,594
10.00
0.65
119,346

223,024
6.00
0.73
163,084

237,252
7.00
0.69
164,669

252,232
8.00
0.66
166,167

268,000
9.00
0.63
167,580

184,594
10.00
0.59
109,560

1,633,879
1,762,885
3,396,764
(50,000)
3,346,764

160,376
1.00
0.95
152,224
1,514,665
1,618,335
3,133,000

Gordon Growth
20,106,815

171,344
2.00
0.90
154,367

182,902
3.00
0.86
156,404
Gordon Growth
8,651,336

EBITDA Multiple
2,726,691

195,081
4.00
0.81
158,339

158,711
5.00
0.77
122,271
EBITDA Multiple
2,726,691