This project forecasts future cash flows, determines their present value, and estimates the company's overall valuation using financial modelling techniques.
Project Problem Statement: Financial Valuation & Future Cash Flow Projection
This project aims to assess a company's financial health by forecasting future cash flows and determining its valuation using financial modeling techniques. By analyzing key financial statements, the goal is to project free cash flows, calculate the Weighted Average Cost of Capital (WACC), determine the terminal value, and discount future cash flows to their present value.
The process begins with revenue forecasting, developing a fixed assets schedule, and estimating net working capital to derive projected cash flows. The WACC is then computed to discount these cash flows, ensuring an accurate valuation. Terminal value calculation accounts for the company’s worth beyond the forecast period. Finally, both free cash flows and terminal value are discounted to determine the enterprise value, providing a comprehensive assessment of the company's present and future financial position.
This approach allows for a data-driven valuation, supporting strategic decision-making for investors, analysts, and stakeholders.