Financial Model (Toys & Seasonal) Excel Template
Originally published: 03/07/2018 07:52
Last version published: 15/01/2020 09:14
Publication number: ELQ-38648-11
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Financial Model (Toys & Seasonal) Excel Template

A full example Financial Model of a retail company (Toys & Seasonal) to download and analyse.

Description
The purpose is to calculate, compare, and apply different theories of corporate valuation in order to assess their equivalence by using as a platform a retail company (Jumbo)

A full excel model is provided as well as 1 presentation in PDF format

More precisely the following theories will be considered:
Free Cash Flow to Equity (“FCFE”)
Free Cash Flow to the Firm (“FCFF”)
Dividend Discount Model (“DDM”)
Economic Profit Model (“EP”)
Economic Value Added Model (“EVA”) and
Comparable Companies Multiples (“CCM”)

In order to value Jumbo S.A., several steps will be conducted. The first step consists of a brief overview of the valuation process.

In the second step, corporate valuation theories will be analyzed based on a discussion of advantages and disadvantages through a relevant international literature review which will include a comparison of the various methods.

In the third step, the methodology will consist of three distinct phases:

A) The strategic analysis: the focus will be based on the Company's position within the industry, the level of competition and the Company's strengths, weaknesses, or threats and opportunities as well as the future development of the games, toys & specialty retailers sector.

B) The next phase is the financial statements forecast. The purpose of this phase is to identify trends in order to forecast value drivers and therefore forecast financial statements for the period 2013 - 2017.

C) Regarding the last phase, the discount rates will be calculated (cost of equity - “CoE” and weighted average cost of capital - “WACC”) which will also take into account the country risk premium related to the exposure of the company when operating in emerging and / or distressed markets.

The fourth step will be the presentation of the Company and the justification of its selection based on several criteria.

The fifth step is the results of the various valuation methods which will determine the equity market value of Jumbo S.A. As part of the analysis equity value and share price will be determined, and the results of the various methods will be compared. Additionally, the equity value range of the Company as estimated through sensitivity analysis will be compared to official equity value estimates published by professional analysts, as well as with the actual market price.

Finally we will present the valuation results based on the various methods utilized and a conclusion will be reached in the last step.

This Best Practice includes
1 Excel file and 1 PDF

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Further information

Provide a tool to perform the valuation of a company using various valuation methods

Company to be valued needs to have some sort of financial statements. Even simple ones

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  • JoJoGo(last updated: 20/03/2019 14:59)

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Discussion feed for Financial Model (Toys & Seasonal) Excel Template

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  • Alejandro Alvarez
    Change in Working Capital.
    My question is about the way you calculated the change in Working Capital, as you are inputting Non-Current Liabilities and excluding Cash from the Current Assets. I thought that the formula is as follows:
    Change in working capital= change in current assets - change in current liabilities.
    Thank you!
    Alex.
    arrow_drop_uparrow_drop_downReply reply
    • Big4WallStreet
      Dear Alex,

      Thank you for your question.

      Yes indeed, the official definition of working capital is Currents Assets - Current Liabilities.

      However for valuation and operational cash flow purposes , we use the operational working capital definition which is Inventory + Receivables - Payable (either long term or short term).

      Regarding your question on Non Current Liabilities, some Non Current Liabilities such as long term payable are considered part of working capital while others such as debt is not considered part of working capital.

      The same can be said for current liabilities. For example the portion of a loan that is due in the current year will be classified as a current liability based on the "official" definition, however for operational cash flow purposes this will be accounted for as a financing outflow and not a working capital flow.

      Hope this helps!

      Best Regards,
      Andreas
      Big4WallStreet Team
      arrow_drop_uparrow_drop_downReply reply


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