edit DPCF calc

dbogatic · Sep 22, 2021 · 1776d61 · 1776d61
1 parent 6aaaaf5
commit 1776d61
Showing 1 changed file with 18 additions and 17 deletions.
diff --git a/intrinsic_value.ipynb b/intrinsic_value.ipynb
@@ -5867,7 +5867,7 @@
     "\n",
     "## Calculate terminal value after ten years:\n",
     "\n",
-    "* DPCF = ((BYFCF*(1+g)**11) * (1+g) / r-lgr) * (1/(1+r)**11)\n",
+    "* DPCF = BYFCF*((1+g)**11) * (1+lgr) / (r-lgr) * (1/(1+r)**11)\n",
     "\n",
     "## Calculate Intrinsic value:\n",
     "\n",
@@ -5879,7 +5879,7 @@
   },
   {
    "cell_type": "code",
-   "execution_count": 23,
+   "execution_count": 22,
    "source": [
     "# Specify variables for DCF model\n",
     "\n",
@@ -5888,7 +5888,7 @@
     "g = growth['freeCashFlowGrowth'].mean() # growth of earnings first ten years (average FCF)\n",
     "BYFCF = cash['freeCashFlow'].loc['2020'] # base year FCF\n",
     "FCF  = BYFCF*(1+g)**n # FCF future value after reriod ten years\n",
-    "lgr = 0.03 # long term growth rate to last indefinitely \n",
+    "lgr = 0.02 # long term growth rate to last indefinitely \n",
     "\n",
     "shares_outstanding = income['weightedAverageShsOutDil'].loc['2020']"
    ],
@@ -5897,7 +5897,7 @@
   },
   {
    "cell_type": "code",
-   "execution_count": 24,
+   "execution_count": 23,
    "source": [
     "# Calculate discounted free cash flow for period of ten years\n",
     "DFCF = FCF / (1+r)\n",
@@ -5914,17 +5914,17 @@
       ]
      },
      "metadata": {},
-     "execution_count": 24
+     "execution_count": 23
     }
    ],
    "metadata": {}
   },
   {
    "cell_type": "code",
-   "execution_count": 25,
+   "execution_count": 24,
    "source": [
     "# Calculate terminal value past ten years\n",
-    "DPCF = ((BYFCF*(1+g)**11) * (1+g) / r-lgr) * (1/(1+r)**11)\n",
+    "DPCF = BYFCF*((1+g)**11) * (1+lgr) / (r-lgr) * (1/(1+r)**11)\n",
     "DPCF"
    ],
    "outputs": [
@@ -5933,19 +5933,19 @@
      "data": {
       "text/plain": [
        "date\n",
-       "2020-09-26   2158257750000.35\n",
+       "2020-09-26   2304724402586.77\n",
        "Name: freeCashFlow, dtype: float64"
       ]
      },
      "metadata": {},
-     "execution_count": 25
+     "execution_count": 24
     }
    ],
    "metadata": {}
   },
   {
    "cell_type": "code",
-   "execution_count": 26,
+   "execution_count": 25,
    "source": [
     "# Calculate intrinsic value\n",
     "intrinsic_value = DFCF + DPCF\n",
@@ -5957,12 +5957,12 @@
      "data": {
       "text/plain": [
        "date\n",
-       "2020-09-26   2550939911910.17\n",
+       "2020-09-26   2697406564496.59\n",
        "Name: freeCashFlow, dtype: float64"
       ]
      },
      "metadata": {},
-     "execution_count": 26
+     "execution_count": 25
     }
    ],
    "metadata": {}
@@ -5981,7 +5981,7 @@
      "data": {
       "text/plain": [
        "date\n",
-       "2020-09-26   145.53\n",
+       "2020-09-26   153.89\n",
        "dtype: float64"
       ]
      },
@@ -5993,11 +5993,12 @@
   },
   {
    "cell_type": "code",
-   "execution_count": 28,
+   "execution_count": 32,
    "source": [
     "# Calculate margin of safety\n",
     "market_cap = key_metrics['marketCap'].loc['2020']\n",
     "market_cap_per_share = market_cap / shares_outstanding\n",
+    "\n",
     "print(f'Current Market Value = {market_cap_per_share}')\n",
     "print(f'Intrinsic Value = {intrinsic_value_per_share}')\n",
     "\n",
@@ -6014,7 +6015,7 @@
     "\n",
     "else:\n",
     "\n",
-    "    print('Insufficient margin, keep searching!')"
+    "    print('Insufficient margin, keep searching!')\n"
    ],
    "outputs": [
     {
@@ -6025,10 +6026,10 @@
       "2020-09-26   113.89\n",
       "dtype: float64\n",
       "Intrinsic Value = date\n",
-      "2020-09-26   145.53\n",
+      "2020-09-26   153.89\n",
       "dtype: float64\n",
       "Margin = date\n",
-      "2020-09-26   0.78\n",
+      "2020-09-26   0.74\n",
       "dtype: float64\n",
       "Insufficient margin, keep searching!\n"
      ]