Simple Discounted Cash Flow Model
DCF Analysis
Year 1 2 3 4 5
2022E 2023E 2024E 2025E 2026E
Revenue $13,600.0 $14,280.0 $14,994.0 $15,743.7 $16,530.9
% Growth 5% 5% 5% 5%
EBITDA $5,400.0 $5,751.9 $6,125.5 $6,522.1 $6,943.0
% Margin 40% 40% 41% 41% 42%
Cash Taxes Calculation
EBITDA $5,400.0 $5,751.9 $6,125.5 $6,522.1 $6,943.0
Less: Depreciation and Amortization (95.2) (100.0) (105.0) (110.2) (115.7)
EBIT $5,304.8 $5,651.9 $6,020.5 $6,411.9 $6,827.3
Cash Taxes 40.0% $2,121.9 $2,260.8 $2,408.2 $2,564.7 $2,730.9
Capital Expenditures $68.0 $71.4 $75.0 $78.7 $82.7
Net Working Capital $680.0 $714.0 $749.7 $787.2 $826.5
Change in NWC $34.0 $35.7 $37.5 $39.4
EBITDA $5,400.0 $5,751.9 $6,125.5 $6,522.1 $6,943.0
Less: Cash Taxes (2,121.9) (2,260.8) (2,408.2) (2,564.7) (2,730.9)
Less: Changes in W/C 0.0 (34.0) (35.7) (37.5) (39.4)
Less: Capital Expenditures (68.0) (71.4) (75.0) (78.7) (82.7)
Total Unlevered Free Cash Flow $3,210.1 $3,385.7 $3,606.6 $3,841.1 $4,090.1
Total Discounted Unlevered Free Cash Flow $2,958.6 $2,876.0 $2,823.6 $2,771.6 $2,720.1
PV of Unlevered FCF $14,150.0
Implied Enterprise / Equity Valuation from DCF Analysis
Forward (2026E) EBITDA $6,943.0
Terminal Multiple 12.0x
Terminal Value $ 83,315.7
Present Value of Terminal Value $55,408.7
PV of Unlevered FCF $14,150.0
Plus: PV of Terminal Value 55,408.7
Implied TEV / Present Value $69,558.7
Plus: Cash 9,200.0
Less: Debt (50.0)
Implied Equity Value $78,708.7
Shares Outstanding 1,000
Implied Share Price Valuation $78.71
Sensitivities
Enterprise Value ($M)
Terminal Multiple
EV $69,558.7 10.0x 11.0x 12.0x 13.0x 14.0x
7.5% $62,906 $67,742 $72,579 $77,415 $82,251
8.0% 61,598 66,323 71,048 75,774 80,499
WACC 8.5% 60,324 64,941 69,559 74,176 78,793
9.0% 59,084 63,596 68,109 72,621 77,133
9.5% 57,876 62,286 66,697 71,107 75,517
Implied Share Price
Terminal Multiple
10.0x 11.0x 12.0x 13.0x 14.0x
7.5% $72.06 $76.89 $81.73 $86.56 $91.40
8.0% 70.75 75.47 80.20 84.92 89.65
WACC 8.5% 69.47 74.09 78.71 83.33 87.94
9.0% 68.23 72.75 77.26 81.77 86.28
9.5% 67.03 71.44 75.85 80.26 84.67
Identified an ideal acquisition target for a client based on a SWOT analysis and
assessment of their strategic criteria.
Constructed a DCF model to calculate the implied equity and share value of the
acquisition target.
Completed a sensitivity analysis to illustrate how the target’s valuation would change as
variables change.
Created a company profile summarizing all key information about the target.
“Why are you interested in this role?”
I recently participated in Bank of America’s virtual job simulation on the Forage platform,
and it was incredibly useful to understand what it might be like to be part of an
investment banking team at Bank of America.
The job simulation enabled me to become more familiar with advanced Excel and to
develop my passion for providing targeted solutions for complex clients.
Through this program I realized that I really enjoy working on high value, high stakes
projects and would love to apply what I've learned in an investment banking team at a
company like Bank of America.
