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Extend dcf analysis to ten years #2

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Binary file modified Mining_Contractor_Valuation_Model.xlsx
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33 changes: 17 additions & 16 deletions mining_contractor_valuation_model.py
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Original file line number Diff line number Diff line change
Expand Up @@ -203,35 +203,36 @@ def create_dcf_valuation(writer):
'Tax Rate (%)',
'Revenue Growth Rate (Years 1-3)',
'Revenue Growth Rate (Years 4-5)',
'Revenue Growth Rate (Years 6-10)',
'EBITDA Margin (Terminal)',
'Capex as % of Revenue',
'Working Capital as % of Revenue',
'Depreciation as % of Capex'
],
'Value': [2.5, 12.0, 25.0, 8.0, 5.0, 15.0, 8.0, 10.0, 80.0]
'Value': [2.5, 12.0, 25.0, 8.0, 5.0, 3.0, 15.0, 8.0, 10.0, 80.0]
}

# DCF Projections (5 years)
years = ['2025', '2026', '2027', '2028', '2029', 'Terminal']
# DCF Projections (10 years)
years = ['2025', '2026', '2027', '2028', '2029', '2030', '2031', '2032', '2033', '2034', 'Terminal']
dcf_projections = {
'Year': years,
'Revenue': [0, 0, 0, 0, 0, 0],
'EBITDA': [0, 0, 0, 0, 0, 0],
'EBIT': [0, 0, 0, 0, 0, 0],
'Taxes': [0, 0, 0, 0, 0, 0],
'NOPAT': [0, 0, 0, 0, 0, 0],
'Depreciation': [0, 0, 0, 0, 0, 0],
'Capex': [0, 0, 0, 0, 0, 0],
'Working Capital Change': [0, 0, 0, 0, 0, 0],
'Free Cash Flow': [0, 0, 0, 0, 0, 0],
'Discount Factor': [0, 0, 0, 0, 0, 0],
'Present Value': [0, 0, 0, 0, 0, 0]
'Revenue': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'EBITDA': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'EBIT': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Taxes': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'NOPAT': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Depreciation': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Capex': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Working Capital Change': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Free Cash Flow': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Discount Factor': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0],
'Present Value': [0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0]
}

# DCF Summary
dcf_summary = {
'Metric': [
'Sum of PV of FCF (2025-2029)',
'Sum of PV of FCF (2025-2034)',
'Terminal Value',
'PV of Terminal Value',
'Enterprise Value',
Expand Down Expand Up @@ -383,7 +384,7 @@ def create_valuation_summary(writer):
'Weight (%)': [40, 30, 20, 10, 100],
'Weighted Value (R$ MM)': [0, 0, 0, 0, 0],
'Notes': [
'Based on 5-year projections',
'Based on 10-year projections',
'Based on trading multiples',
'Based on transaction multiples',
'Based on asset values',
Expand Down
37 changes: 22 additions & 15 deletions updated_valuation_model.py
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Original file line number Diff line number Diff line change
Expand Up @@ -257,29 +257,36 @@ def create_dcf_valuation(writer, annual_data):
'Tax Rate (%)',
'Revenue Growth Rate (Years 1-3)',
'Revenue Growth Rate (Years 4-5)',
'Revenue Growth Rate (Years 6-10)',
'EBITDA Margin (Terminal)',
'Capex as % of Revenue',
'Working Capital as % of Revenue',
'Depreciation as % of Capex'
],
'Value': [2.5, 12.0, 25.0, 5.0, 3.0, 15.0, 8.0, 10.0, 80.0]
'Value': [2.5, 12.0, 25.0, 5.0, 3.0, 2.5, 15.0, 8.0, 10.0, 80.0]
}

# DCF Projections (5 years) - starting with annualized 2025 data
years = ['2025', '2026', '2027', '2028', '2029', 'Terminal']
# DCF Projections (10 years) - starting with annualized 2025 data
years = ['2025', '2026', '2027', '2028', '2029', '2030', '2031', '2032', '2033', '2034', 'Terminal']

# Calculate projections
revenue_2025 = annual_data['Revenue']
revenue_growth_y1_3 = 0.05 # 5%
revenue_growth_y4_5 = 0.03 # 3%
revenue_growth_y6_10 = 0.025 # 2.5%

revenues = [
revenue_2025,
revenue_2025 * (1 + revenue_growth_y1_3),
revenue_2025 * (1 + revenue_growth_y1_3) ** 2,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5),
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * 1.025 # Terminal
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10),
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10) ** 2,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10) ** 3,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10) ** 4,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10) ** 5,
revenue_2025 * (1 + revenue_growth_y1_3) ** 2 * (1 + revenue_growth_y4_5) ** 2 * (1 + revenue_growth_y6_10) ** 5 * 1.025 # Terminal
]

ebitda_margin = 0.15
Expand All @@ -302,8 +309,8 @@ def create_dcf_valuation(writer, annual_data):
for nopat, capex, wc_change in zip(nopats, capexes, wc_changes)]

wacc = 0.12
discount_factors = [1 / (1 + wacc) ** (i + 1) for i in range(5)]
discount_factors.append(1 / (1 + wacc) ** 5) # Terminal year
discount_factors = [1 / (1 + wacc) ** (i + 1) for i in range(10)]
discount_factors.append(1 / (1 + wacc) ** 10) # Terminal year

present_values = [fcf * df for fcf, df in zip(free_cash_flows, discount_factors)]

Expand All @@ -314,7 +321,7 @@ def create_dcf_valuation(writer, annual_data):
'EBIT': ebits,
'Taxes': taxes,
'NOPAT': nopats,
'Depreciation': [annual_data['Total_Assets'] * depreciation_rate] * 6,
'Depreciation': [annual_data['Total_Assets'] * depreciation_rate] * 11,
'Capex': capexes,
'Working Capital Change': wc_changes,
'Free Cash Flow': free_cash_flows,
Expand All @@ -323,16 +330,16 @@ def create_dcf_valuation(writer, annual_data):
}

# DCF Summary
pv_fcf_5yr = sum(present_values[:5])
terminal_value = free_cash_flows[5] / (wacc - 0.025) # 2.5% terminal growth
pv_terminal = terminal_value / (1 + wacc) ** 5
enterprise_value = pv_fcf_5yr + pv_terminal
pv_fcf_10yr = sum(present_values[:10])
terminal_value = free_cash_flows[10] / (wacc - 0.025) # 2.5% terminal growth
pv_terminal = terminal_value / (1 + wacc) ** 10
enterprise_value = pv_fcf_10yr + pv_terminal
net_debt = annual_data['Total_Debt'] - annual_data['Cash']
equity_value = enterprise_value - net_debt

dcf_summary = {
'Metric': [
'Sum of PV of FCF (2025-2029)',
'Sum of PV of FCF (2025-2034)',
'Terminal Value',
'PV of Terminal Value',
'Enterprise Value',
Expand All @@ -341,7 +348,7 @@ def create_dcf_valuation(writer, annual_data):
'Shares Outstanding (MM)',
'Value per Share'
],
'Value': [pv_fcf_5yr, terminal_value, pv_terminal, enterprise_value, net_debt, equity_value, 10, equity_value / 10]
'Value': [pv_fcf_10yr, terminal_value, pv_terminal, enterprise_value, net_debt, equity_value, 10, equity_value / 10]
}

# Write to Excel
Expand Down Expand Up @@ -541,7 +548,7 @@ def create_valuation_summary(writer, annual_data):
'Weight (%)': [40, 30, 20, 10, 100],
'Weighted Value (R$ MM)': [dcf_value * 0.4, comp_value * 0.3, precedent_value * 0.2, asset_value * 0.1, 0],
'Notes': [
'Based on 5-year projections',
'Based on 10-year projections',
'Based on trading multiples',
'Based on transaction multiples',
'Based on asset values',
Expand Down Expand Up @@ -593,7 +600,7 @@ def create_sensitivity_analysis(writer, annual_data):
for growth in growth_scenarios:
# Simplified DCF calculation
terminal_value = base_ebitda * (1 + growth/100) / (wacc/100 - growth/100)
dcf_value = terminal_value / (1 + wacc/100) ** 5
dcf_value = terminal_value / (1 + wacc/100) ** 10

sensitivity_data.append({
'WACC (%)': wacc,
Expand Down