Valuation formulas

Question 1

NOPAT

Answer 1

Net operating profit after tax

EBIT - Operating Tax

Question 2

EBIT

Answer 2

EBIT = Total revenue - COGS - Operating expenses - Depreciation & Amortization

EBIT = Net income + interest + taxes

Question 3

Working Capital

Answer 3

Accounts receivable + inventory - accounts payable

Question 4

CapEx

Answer 4

Property plant & equipment (current) - Property plant & equipment (prior) + depreciation

Question 5

RONIC

Answer 5

Return on new invested capital

RONIC = Terminal growth / (1 - (( Terminal value * (WACC * terminal growth))/(NOPAT * (1 + Terminal Growth)))

Question 6

NOPLAT in year one

Answer 6

EBIT * (1 - Tax)

Investment * ROIC

Question 7

Enterprise Value

Answer 7

EV = NOPLAT *(1-g/ROIC)/(WACC-g)

Question 8

Market Cap

Answer 8

EV-debt

Question 9

ROIC

Answer 9

(operating income (1-tax rate))/Book value of invested capital

Question 10

Net operating income

Answer 10

EBIT - Interest - Tax

Question 11

EBIDTA

Answer 11

Net income + interest expense + tax + depreciation + amortisation

EBIDTA = Operating income + D&A

Question 12

Gross profit

Answer 12

Gross profit = Total revenue - COGS

Question 13

Difference between EBIDTA & Gross profit

Answer 13

Investors and analysts might want to break down the different profit metrics to peer into the workings of a company.

EBITDA helps to strip out management decisions or possible manipulation by removing debt financing for example

Gross profit can help analyze the production efficiency of a retailer that might have a lot of cost of goods sold

Question 14

Total intangible assets

Answer 14

Good Will + Other intangible assets

Question 15

Deferred tax

Answer 15

A deferred tax liability is a tax that is assessed or is due for the current period but has not yet been paid

Question 16

Total Current liabilities

Answer 16

ST interest bearing liabilities + Accounts payable + Current tax liabilities + Other current liabilities + Accrued expenses and deferred income

Question 17

Accrued expenses and deferred income

Answer 17

Deferred revenue is the portion of a company’s revenue that has not been earned, but cash has been collected from customers in the form of a prepayment. Accrued expenses are the expenses of a company that have been incurred but not yet paid.

Question 18

Balance Sheet (Assets)

Answer 18

Goodwill
Other intangible assets
= Total intangible assets

Land & buildings
Equipment, tools and fixtures
Construction in progress
= Total PP&E

Shares in associates
Other LT securities holdings
Other non-current receivables
= Total financial assets

Deferred tax assets
= Total non-current assets

Inventory
Accounts receivable
Current tax assets
Other current receivables
Prepaid expenses & accrued income
Cash & bank

= Total current assets

Question 19

Balance Sheet (Equity & Liabilities)

Answer 19

Share capital
Other capital contributions
Reserves
Retained earnings
Total common equity
Non-controlling interests
= Total equity

Provisions for pensions & similar
LT Interest-bearing liabilities
Deferred tax liability
Other non-current liabilities
= Total non-current liabilities

ST interest-bearing liabilities
Accounts payable
Current tax liabilities
Other current liabilities
Revolver
Accrued expenses & deferred income
= Total current liabilities

= Total equity & liabilities

Question 20

Income statement (Axfood)

Answer 20

Total sales

• Cost of goods sold
  = Gross profit

-Selling expenses
-Administrative expenses
Share of profit in associates
+Other operating income
- Other operating expense
- Total OPEX
= Operating profit (EBIT)

+ Interest income & similar items
- Interest expense & similar items
= Net financial items
= Profit before tax

• Current tax
• Deferred tax
• Accounting taxes, total
  = Net profit

Question 21

Resultat räkning (Swedish)

Answer 21

Nettoomsättning, aktiebolag (Total revenue)
- Kostnad sålda varor (COGS)
= Bruttoresultat

-Försäljningskostnader
-Administrationskostnader
-FoU-kostnader (R&D)
-Förändring av lager mm (Prior Inv - Current Inv)
-Aktiverat arbete egen räkning
-Råvaror & förnödenheter
-Handelsvaror
-Personalkostnader (Personal costs)
-Avskrivningar (Depreciation)
-Jämförelsestörande poster
-Övriga rörelseintäkter
-Övriga rörelseintäkter - funkindelat
-Övriga rörelsekostnader
-Övriga externa kostnader
= Rörelseresultat (EBIT)

Resultat från andelar i koncern- och intresseföretag
Ränteintäkter från koncernbolag
Externa ränteintäkter
Räntekostnader till koncern
Externa räntekostnader
Övriga finansiella intäkter
Övriga finansiella kostnader
Jämförelsestörande finansiella poster
Resultat efter finansnetto
Extraordinära intäkter
Extraordinära kostnader
Koncernbidrag
Aktieägartillskott
Bokslutsdispositioner
Skatt
Minoritetsintressen
= Årets resultat (Net income)

Question 22

Cash Flow statement

Answer 22

Cash flow statement (as stated)
Operating profit
D&A charged against profit
- Interest paid
Interest received
Adjustments for non-cash items
- Paid tax
= CFO before changes in NWC

Change in inventories
Change in current receivables
Change in current liabilities
Change in net working capital

= Cash flow from operating activities

Acquisitions of intangible assets
Acquisitions of PP&E
Acquisitions of operations
Sale of operations
Sale of PP&E
Change in other financial assets
= Cash flow from investing activities

New loans raised
Revolver
Amortization of debt
Share repurchases
Dividend paid out
= Cash flow from financing activities

= Cash flow for the period

Question 23

FCFF

Answer 23

Sales
EBITDA
Net working capital
% of sales

EBIT
- Operating taxes
= NOPAT
\+ D&A
\+ Other non-cash items
- Capex
\+/- Change in NWC
= FCFF

Question 24

Dupont break down

Answer 24

ROE CY17
∆ Gross margin
∆ OPEX component
∆ D&A component
∆ Interest component
∆ Tax component
∆ Cash turnover
∆ Accounts receivables turnovers
∆ Inventory turnover
∆ Other current asset turnover
∆ Long-term asset turnover
∆ Equity multiplier
Compounding effects
ROE CY20

[variable name] CY20 - [variable name] CY17 = Delta

Question 25

OPEX

Answer 25

Abbreviated as OPEX, operating expenses include rent, equipment, inventory costs, marketing, payroll, insurance, and funds allocated for research and development.

One of the typical responsibilities that management must contend with is determining how to reduce operating expenses without significantly affecting a firm’s ability to compete with its competitors.

Question 26

ROE

Answer 26

Return on Equity = Net income / Shareholder equity

Question 27

ROA

Answer 27

Return on Assets = Net income / Total Assets

Question 28

Current Asset turnover

Answer 28

Current asset turnover = Sales/Current Asset Turnover

Question 29

Cash turnover

Answer 29

Cash Turnover = Sales / Cash & Equivalents