Income Statement β NOPLAT = (πΈπ΅πΌπ − πππ ππππππ‘πππ ππππππ‘) × (1 − π‘π) Non-operating profit, often being dividends received, also has been gain on disposal of equipment. Net operating profit less adjusted taxes refers to after-tax EBIT adjusted for deferred taxes. NOPLAT excludes: - Any payments to providers of capital, i.e. dividend or interest payments. - Tax shield of debt (included in WACC calculation) - Income or expenses associated with non-operating items. ππππΏπ΄π ππππππ = ππππΏπ΄π/π ππππ β Change in WC = (πΌ, π·&π)π‘ − (πΌ, π·&π)π‘−1 − ππππππ‘πππ π‘ + ππππππ‘πππ π‘−1 Where πΌ, π·&π is πΌππ£πππ‘πππππ , ππππ‘πππ πππ ππππππ‘πππ πππ β The swap the signs which doesn’t really make sense. This formula is essentially current operating assets - current operating assets last period - creditors + creditors last period β Capex = πππΈπ‘ − πππΈπ‘−1 − (πππππππππ‘πππ) Depreciation becomes a double negative so the value is positive β FCF = ππππΏπ΄π + πππππππππ‘πππ + (πππππ₯) − βππΆ = ππππΏπ΄π − πππΈ + πππΈπ‘−1 − βππΆ = ππππΏπ΄π − βπππ£ππ π‘ππ πππππ‘ππ + ππππππ β ππ‘πππ β Working Capital = πΆπ’πππππ‘ ππππππ‘πππ ππ π ππ‘π − πΆπ’πππππ‘ ππππππππ‘πππ Does not include short term debt in current liabilities or cash/marketable securities in current assets. WC = operating cash + acc receivable + inventories - acc payable - accrued expenses β Cost of equity = ππ + πππ‘π × πΈπ π β WACC = (ππ + πππ‘π × πΈπ π) × %ππ ππ πππ’ππ‘π¦ + ππππππππ ππππππ€πππ πππ π‘ × (1 − π‘π) × %ππ ππ ππππ‘ πΈ π· = π·+πΈ × ππ + π·+πΈ × ππ × (1 − π‘π) Where equity is equal to the market cap. π β CV = (ππππΏπ΄π × (1 + π)(1 − π πππΌπΆ ))/(ππ΄πΆπΆ − π) 1 1 2 1 β Enterprise DCF = πΉπΆπΉπ‘+1 × 1+ππ΄πΆπΆ + πΉπΆπΉπ‘+2 × ( 1+ππ΄πΆπΆ ) + πΆπ( 1+ππ΄πΆπΆ ) 2 β Value of equity = πππ‘ππππππ π πππ + ππ‘βππ ππ π ππ‘π − ππππ‘ Where other assets is generally other investments β Difference to current share price = ππππ’π ππ πππ’ππ‘π¦/ππ’πππππ‘ π βπππ πππππ − 1 β Operating invested capital = ππππ‘ + ππππππππ¦ πππ’ππ‘π¦ − ππ‘βππ ππ π ππ‘π Where other assets is again generally under other investments Also = WC + PPE β Capital Turnover = π ππππ π‘ / πππ£ππ π‘ππ πππππ‘πππ‘−1 β ROIC from operations = ππππΏπ΄ππ‘ / ππππππ‘πππ πππ£ππ π‘ππ πππππ‘πππ‘−1 β Normalised earnings = (ππππ‘ππ₯ ππππππ‘ + π’ππ’π π’ππ πππ π‘π − π’ππ’π π’ππ ππππππ‘π )(1 − π‘π) + πππππππ‘π¦ πππ‘ππππ π‘ Unusual costs include impairment charges and redundancy costs. Unusual profits include gain on disposal of an asset. β Diluted normalised EPS = (ππππππππ ππ ππππππππ + ππππππππ ππ ππ ππ₯πππππ π)/(ππ. ππ π βππππ + ππ₯πππ’π‘ππ£π πππ‘ππππ ) β Earnings on option exercise = ππ. ππ ππ₯ππ πππ‘ππππ × π π‘ππππ × ππππππ€πππ πππ π‘ × (1 − π‘π) β PE = π βπππ πππππ / ππππ’π‘ππ πππ ππππππππ ππ πΈππ β Market cap = π βπππ πππππ × ππ. ππ π βππππ β Price/Book/share = π βπππ πππππ / ππππππππ¦ πππ’ππ‘π¦ / ππ. ππ π βππππ = ππππππ‘ πππ / ππππππππ¦ πππ’ππ‘π¦ β Dividend Yield = ππππππππ¦ πππ£ππππππ /ππππππ‘ πππ β Adjusted EBITDA = πΈπ΅πΌπ + πππππππππ‘πππ + πππππ€πππ πβππππ − πππ£ππππππ ππππππ£ππ β EBITDA from ops = πππππ − πΆππΊπ − π, πΊ&π΄ ππ₯ππππ ππ β EV = ππ ππ πππ’ππ‘π¦ + πππππππ‘π¦ πππ‘ππππ π‘ + ππ ππ ππ₯πππ’π‘ππ£π πππ‘ππππ + ππππ‘ β EV of ops = ππ ππ πππ’ππ‘π¦ + ππ ππ ππ₯πππ’π‘ππ£π πππ‘ππππ + ππππ‘ − πππ ππππππ‘πππ ππ π ππ‘π Could also include minority interest, need to check that β Adjusted EV = πΈπ − πΌππ£ππ π‘ππππ‘π β EV multiple = ππππ’π π‘ππ πΈπ/ππππ’π π‘ππ πΈπ΅πΌππ·π΄ β EV = πΈππ × ππππ’π π‘ππ πΈπ΅πΌππ·π΄ + πππ’ππ‘π¦ πππ£ππ π‘ππππ‘π β Value of equity = πΈπ − πππππππ‘π¦ πππ‘ππππ π‘ − ππ₯ππ πππ‘ππππ − ππππ‘ β Value per share = π£πππ’π ππ πππ’ππ‘π¦/ππ. ππ π βππππ β Equity to debt ratio = ππππππ‘ πππ/ππππ‘ β . β Weighted average no. of diluted shares = ππππππππ¦ π βππππ + π€πππβπ‘ππ π βππππ ππ π π’ππ − π€πππβπ‘ππ π βππππ ππ’π¦ππππ + πππππ‘πππππ π βππππ π’ππππ πππ‘πππ ππ₯πππππ π β Operating margin = πΈπ΅πΌπ/πππ£πππ’π β Economic profit = (π ππΌπΆ − ππ΄πΆπΆ) * ππ£π πππ£ππ π‘ππ πππππ‘ππ = ππππΏπ΄π − πππππ‘ππ πβππππ Normalised, Diluted EPS =Adjusted Normalised Earnings/Diluted Shares =(Normalised Earnings + Earnings on option exercise)/Diluted Shares =(Normalised Earnings + No. of Options*Option Exercise Price*(1-tax)*Cost of Debt)/Diluted Shares [Note: “weighted average” =time-weighted average, adjusted to remaining time] Earnings on option exercise=no. of executive options*borrowing cost*(1-marginal tax rate) Diluted Shares=Ordinary Shares + Additional Shares under Options Exercise -Shares Buyback Some Definitions β’ Other Assets (value of Non-Operating Assets): Excess Cash, Marketable Securities, Equity Investment Income, income from associates, NPV of tax losses, Assets Held for Sale, Retirement Benefit Assets, interest on operating lease, Excess real estate, unutilized assets, etc. β’ Normalisation: Net Profit Attributable to Ordinary Shareholders, Net loss on disposal of PPE, profit/loss on sale of asset, unusual income, pension fund revaluations, write-offs, redundancy costs; No-cash items (goodwill amortisation/impairment charges); Treatment of R&D; Abnormal tax rate; Economic cycle; Investments, lazy assets, new projects in startup period.