Air Thread
A. How should the Cash Flows be valued for 2008-2012?
The calculation of each cash flow required us to use the projections from AirThread Connections that are given in the Exhibit 1 of the case allowing us to know the Total Revenue, EBITDA, EBIT and the Unlevered Net Income to be able to compute the Unleveraged Cash Flow (UFCF) from 2008-2012.
As well we used Depreciation & Amortization, Capital Expenditures and the assumptions established in AirThread Connections Exhibit 1 case to make the adjustments that Working Capital needed to fully calculate the Unleveraged Cash Flows from 2008 – 2012. Revenue Projections | | 2008 | 2009 | 2010 | 2011 | 2012 | Service Revenue | | 4,194.33 | 4,781.54 | 5,379.23 | 5,917.15 | 6,331.35 | Equipment Sales | | 314.77 | 358.84 | 403.70 | 444.07 | 475.15 | Total Revenue | | 4,509.10 | 5,140.38 | 5,782.93 | 6,361.22 | 6,806.50 | | System Operating Expenses | 838.87 | 956.31 | 1,075.85 | 1,183.43 | 1,266.27 | Cost of Equipment Sold | | 755.46 | 861.22 | 968.87 | 1,065.76 | 1,140.36 | Selling, General & Administrative | 1,803.64 | 2,056.15 | 2,313.17 | 2,544.49 | 2,722.60 | EBITDA | | 1,111.14 | 1,266.70 | 1,425.04 | 1,567.54 | 1,677.27 | Depreciation & Amortization | 705.23 | 803.96 | 867.44 | 922.38 | 952.91 | EBIT | | 405.91 | 462.74 | 557.60 | 645.16 | 724.36 | Tax Rate | | 162.36 | 185.10 | 223.04 | 258.07 | 289.74 | Net Operating Profit After Tax | 243.55 | 277.64 | 334.56 | 387.10 | 434.62 | | | | | | | | | | | | | | | Working Capital | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | Accounts Receivable | 435.5 | 521.90 | 595.00 | 669.40 | 736.30 | 787.90 | Days Sales Equip. Rev. | 101.0 | 135.00 | 153.90 | 173.10 | 190.40 | 203.70 | Prepaid Expenses | 41.6 | 46.90 | 53.50 | 60.10 | 66.20 | 70.80 | Accounts Payable | 143.4 | 163.20 | 186.10 | 209.30 |
The calculation of each cash flow required us to use the projections from AirThread Connections that are given in the Exhibit 1 of the case allowing us to know the Total Revenue, EBITDA, EBIT and the Unlevered Net Income to be able to compute the Unleveraged Cash Flow (UFCF) from 2008-2012.
As well we used Depreciation & Amortization, Capital Expenditures and the assumptions established in AirThread Connections Exhibit 1 case to make the adjustments that Working Capital needed to fully calculate the Unleveraged Cash Flows from 2008 – 2012. Revenue Projections | | 2008 | 2009 | 2010 | 2011 | 2012 | Service Revenue | | 4,194.33 | 4,781.54 | 5,379.23 | 5,917.15 | 6,331.35 | Equipment Sales | | 314.77 | 358.84 | 403.70 | 444.07 | 475.15 | Total Revenue | | 4,509.10 | 5,140.38 | 5,782.93 | 6,361.22 | 6,806.50 | | System Operating Expenses | 838.87 | 956.31 | 1,075.85 | 1,183.43 | 1,266.27 | Cost of Equipment Sold | | 755.46 | 861.22 | 968.87 | 1,065.76 | 1,140.36 | Selling, General & Administrative | 1,803.64 | 2,056.15 | 2,313.17 | 2,544.49 | 2,722.60 | EBITDA | | 1,111.14 | 1,266.70 | 1,425.04 | 1,567.54 | 1,677.27 | Depreciation & Amortization | 705.23 | 803.96 | 867.44 | 922.38 | 952.91 | EBIT | | 405.91 | 462.74 | 557.60 | 645.16 | 724.36 | Tax Rate | | 162.36 | 185.10 | 223.04 | 258.07 | 289.74 | Net Operating Profit After Tax | 243.55 | 277.64 | 334.56 | 387.10 | 434.62 | | | | | | | | | | | | | | | Working Capital | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | Accounts Receivable | 435.5 | 521.90 | 595.00 | 669.40 | 736.30 | 787.90 | Days Sales Equip. Rev. | 101.0 | 135.00 | 153.90 | 173.10 | 190.40 | 203.70 | Prepaid Expenses | 41.6 | 46.90 | 53.50 | 60.10 | 66.20 | 70.80 | Accounts Payable | 143.4 | 163.20 | 186.10 | 209.30 |