Discounted Cash Flow (DCF) Analysis Unlevered

Microsoft Corporation (MSFT)

$ 305.24
0.40 0.13%

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 77,84986,83393,58085,32089,950110,360125,843143,015168,088185,696.81205,150.30226,641.74250,384.60276,614.75
Revenue (%)
EBITDA 31,23633,62925,24527,61634,14949,46858,05668,42385,13475,436.3783,339.0592,069.60101,714.76112,370.34
EBITDA (%)
EBIT 27,48128,41719,28820,99425,37139,20746,37455,62773,44861,160.0267,567.1174,645.4082,465.2191,104.22
EBIT (%)
Depreciation 3,7555,2125,9576,6228,77810,26111,68212,79611,68614,276.3615,771.9417,424.2019,249.5521,266.12
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Total Cash 77,02285,70996,526113,240132,981133,768133,819136,527130,334202,596.29223,820.17247,267.45273,171.05301,788.30
Total Cash (%)
Account Receivables 17,48619,54417,90818,27719,79226,48129,52432,01138,04341,266.4645,589.5250,365.4555,641.7061,470.70
Account Receivables (%)
Inventories 1,9382,6602,9022,2512,1812,6622,0631,8952,6364,263.104,709.705,203.085,748.156,350.33
Inventories (%)
Accounts Payable 4,8287,4326,5916,8987,3908,6179,38212,53015,16314,680.3716,218.2717,917.2919,794.2921,867.93
Accounts Payable (%)
Capital Expenditure -4,257-5,485-5,944-8,343-8,129-11,632-13,925-15,441-20,622-16,841.31-18,605.60-20,554.71-22,708.01-25,086.89
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 305.24
Beta 0.779
Diluted Shares Outstanding 7,608
Cost of Debt
Tax Rate 13.83
After-tax Cost of Debt 4.31%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.660
Total Debt 67,775
Total Equity 2,322,265.92
Total Capital 2,390,040.92
Debt Weighting 2.84
Equity Weighting 97.16
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 77,84986,83393,58085,32089,950110,360125,843143,015168,088185,696.81205,150.30226,641.74250,384.60276,614.75
EBITDA 31,23633,62925,24527,61634,14949,46858,05668,42385,13475,436.3783,339.0592,069.60101,714.76112,370.34
EBIT 27,48128,41719,28820,99425,37139,20746,37455,62773,44861,160.0267,567.1174,645.4082,465.2191,104.22
Tax Rate 19.18%20.65%34.12%14.95%8.40%54.57%10.18%16.51%13.83%21.38%21.38%21.38%21.38%21.38%
EBIAT 22,209.7122,547.6912,707.5517,855.1623,239.3117,812.6741,652.5346,444.2963,292.6348,086.1153,123.5858,688.7864,836.9971,629.27
Depreciation 3,7555,2125,9576,6228,77810,26111,68212,79611,68614,276.3615,771.9417,424.2019,249.5521,266.12
Accounts Receivable --2,0581,636-369-1,515-6,689-3,043-2,487-6,032-3,223.46-4,323.05-4,775.93-5,276.26-5,828.99
Inventories --722-24265170-481599168-741-1,627.10-446.60-493.39-545.07-602.17
Accounts Payable -2,604-8413074921,2277653,1482,633-482.631,537.911,699.021,877.012,073.64
Capital Expenditure -4,257-5,485-5,944-8,343-8,129-11,632-13,925-15,441-20,622-16,841.31-18,605.60-20,554.71-22,708.01-25,086.89
UFCF 21,707.7122,098.6913,273.5516,723.1622,935.3110,498.6737,730.5344,628.2950,216.6340,187.9647,058.1851,987.9757,434.2063,450.97
WACC
PV UFCF 31,428.7133,905.9534,510.7035,126.2435,752.76
SUM PV UFCF 201,129.19

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.54
Free cash flow (t + 1) 65,989.01
Terminal Value 1,453,502.51
Present Value of Terminal Value 964,865.33

Intrinsic Value

Enterprise Value 1,165,994.52
Net Debt 56,027
Equity Value 1,109,967.52
Shares Outstanding 7,608
Equity Value Per Share 145.89