Sensitivity Analysis in Excel Template

Prepared by Dheeraj Vaidya, CFA, FRM

dheeraj@wallstreetmojo.com

visit - www.wallstreetmojo.com
Sensitivity Analysis in Excel
Alibaba IPO
DCF Valuations

Free Cash Flow Projections Historicals

(RMB in Million Except Per Share Amount Mar-10 Mar-11

EBIT (873) 1,322

Free Cash Flow to Firm
EBIT x (1-t) (1,420) 1,099
Add: Depreciation & amortization
Less: Capex
Add: Change in working capital
FCFF

Free cash flow to firm of explicit period (2015E to 2019E)

Mar-10 Mar-11
Cash Flows
NPV of explicit period 321,953

Terminal value @ perpetual growth (2019) Mar-10 Mar-11

Terminal value as of 2019
NPV of terminal value 812,148

DCF Valuation Summary

DCF calculation as of Valuation (RMB) Valuation (US$)

NPV of explicit period 321,953 51,791
NPV of terminal value 812,148 130,646
Enterprise Value 1,134,100 182,437
+ Cash $48,550 7,810
- Debt ($40,310) (6,484)
Equity value 1,142,340 183,851
+ Short term investments, restricted cash, investment s 12,587 2,025
+Investment in equity investees 13,009 2,093
+ Alipay valuation 24,866 4,000
Stock Option Value $3,207 516
Adjusted Equity Value 1,189,595 191,452
Share Price 486.21 78.25

Sensitivity Analysis

191.45
1%
2%

growth
3%
4%
5%
6.0%
Historicals Forecasts
Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

5,015 10,751 26,514 33,072 41,871

4,252 9,202 24,575 29,103 36,009

715 805 947 2,691 5,069
(749) (1,046) (3,010) (9,225) (11,679)
4,285 2,260 3,884 4,861
13,246 24,772 26,453 34,261

Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

26,453 34,261

Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

0 0

Cost of Capital 9.00%

Infinite growth rate 3.00%
 WACC
7% 8% 9% 10% 11%
Forecasts
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21

53,260 68,042 86,110 99,367 109,558

45,271 57,155 70,610 79,493 85,455

8,089 11,938 16,831 22,717 29,348
(14,855) (18,979) (24,018) (27,716) (30,558)
6,292 8,167 9,982 7,324 5,630
44,795 58,282 73,405 81,819 89,875

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21

44,795 58,282 73,405 81,819 89,875

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21

- - - - -
 Mar-22

115,580

86,685
36,493
(32,238)
3,327
94,267

Mar-22
94,267

Mar-22
1,618,255