Build A Financial Model

An companyhas sales of $50 million growing at 25% YoY with EBITDA margins at 20%. It secures a JV in Year 3 with additional business of $20 million at EBITDA of 12.5% which linearly scales up to $50 million in Year 6 (linear scaling implies Revenue Yr-3=20, Yr-4=30). Capex required for normal growth of the firm is 7.5% of sales and Capex required for expansion at time of JV is $4 million (after JV year capex for JV revenue will be 7.5% of JV sales). The model should use debt, retained earnings to grow the firm.The current debt ratio of the firm is 2:1 with average cash conversion cycle of 90 days and payment terms with debtor and creditors at 60 days. New Capex should be done at current debt equity ratio. For current year inventory = 6mn, receivables = 8 mn, payables = 5 mn and retained earning = 9mn, Fixed Asset, Net & Gross = 15mn and Cash = 3mn. Tax rate for the company is 30%, Depreciation rate is 10%, Interest Expense Rate is 10% (depreciation and interest to be calculated on average of current and previous year) and Interest Income Rate is 5%(interst income on beginning of period cash). Value the firm using both methods DCF and Relative. For DCF Valuation assume weights of equity and debt based on current book value. Risk free return in the economy is 7%, market risk premium is 7% and Beta of comparable company is 0.5. Company goes in maturity stage from year 7 onwards with growth at 5% forever. For relative valuation use P/E as valuation metric. What would be the value of the firm in year 6 at PE of 15 ? What is the value of the firm today at 1 year forward PE 10 ?

Formulae for Working Capital Line Items: DOH Average Inventory/ (COGS/365) DSO Average Accounts Receivables / (Sales/365) Pay Days Average Trade Payables / (COGS/365)