How much is it worth? You are applying for a job as an equity analyst. The company has given you an Excel spreadsheet Download Excel spreadsheet with some financial information about Zoom. Knowing that demand for the companys only product exploded with the pandemic, the company wants to know what you think the stock price should be. The company does not pay a dividend, so you are forced to use a Discounted Cash Flow Analysis to determine the value of the company. Project Hints You can find all three items (net income, depreciation, and capital expenditures) on the cash flow statement. Due to its business, appropriate capital expenditures include Purchase of property and equipment, Cash paid for acquisition, Purchases of strategic investments, and Purchases of intangible assets. *Note: in finance, defining Capex, is often subjective. Project Instructions In this Assignment, you will use the information given in the Excel document above to determine the company's value and create a write-up explaining your thoughts. Excel File Download the Excel file above. Isolate Net Income, Depreciation, and Capital Expenditures (do not worry about changes in working capital) and calculate Cash Flow from these items (*hint: Capital Expenditures Deprecation is net investment).

Use a cost of capital of 10% to calculate the discounted cash flows. Determine your estimated price per share value. Compare your estimated price to the current price of the stock. You can look it up at any financial website such as CNBCLinks to an external site.. Remember, the ticker symbol for this Zoom is ZM. Word Document Using Word, make your own assumptions about how much Net Income and Net Investment will grow over the next five years and what they will grow in perpetuity. That is a total of 12 assumptions (one for each year and one for perpetuity for two items). In your write up explain the reasoning behind those choices, using your own ideas of how companies (and universities, for that matter) will use Zoom in the future.

Why do you think it's different? What does that say about your estimates compared to what the market is estimating will happen with Zoom. Submission Instructions Submit your well-formatted Excel worksheet, showing your discounted cash flow analysis. Submit your Word Document justifying your assumptions and comparing your estimated value to the current market price.

Zoom Video Communications Consolidated Statements of Operations Zoom Video Communications Consolidated Balance Sheets (in thousands, except share and per share data) 1/31/20221/31/2021 Assets Current assets Cash and cash equivalents 51,062,82052,240,303 Marketable securities \$\$ 4,356,446 \$2,004,410 Accounts receivable 5419,673 S 294,703 Deferred contract acqusition costs, current S 199,266 S 136,630 Prepaid expenses and other current assets Total current assets \begin{tabular}{rrrr} 5 & 145,602 & 5 & 116,819 \\ \hline 5 & 6,183,807 & 54,792,865 \end{tabular} Deferred contract acqusition costs, noncurrent $164,714$157,262 Property and equipment, net $222,354 S 149,924 Operating lease right-of-use- \begin{tabular}{lrrrr} asset & $ & 95,955 & $ & 97,649 \\ Strategic Investments & $ & 367,814 & 5 & 15,668 \\ Goodwill & S & 27,607 & $ & 24,340 \\ Deferred tax assets & 5 & 382,296 & $ & 1,519 \\ Other assets, noncurrent & $ & 106,761 & 5 & 55,766 \\ \cline { 2 - 5 } Total Assets & $ & 7,551,318 & $5,297,993 \\ \hline \hline \end{tabular} Liabilities Current liabilities Accounts payable 5 \$ 7,841 \$ 8,664 Accured expenses and other current liabilities $430,415$393,018 \begin{tabular}{lllll} Deferred revenue, current & $ & 1,141,435 & $858,284 \\ \cline { 2 - 4 } Total current liabilities & $ & 1,579,691 & $1,259,966 \end{tabular} Deferred revenue, noncurrent &38,481$25,211 Operating lease liabilities, noncurrent $85,018$59,415 Other liabilities, noncurrent $68,110$561,634 Total liabilities $1,771,300$1,437,226 Shareholder's Equity Common Stock $299$292 Additional paid-in capital $3,749,514$3,187,168 Accumulated other comprehensive income $(17,902}5839 \begin{tabular}{lrrrr} Retained earnings & 5 & 2,048,107 & 5 & 672,468 \\ \cline { 2 - 5 } Total Stockholder's Equity & 5,780,018 & 53,860,767 \\ \hline \end{tabular} Total Liabilities and Stockholder's Equity 57,551,31855,297,993 Zoom Video communications Consolidated Statement of Cash Flows (in thousands, except share and per share data) 1/31/20221/31/20211/31/2020 Cash flows from operating activities cash provided by operating activities Stock-based compensation expense 5477,287$275,818573,109 income tax benefit from release of valuation allowanceAmortizationofdefferedcontractacqusitioncostsGainsonstrategicinwestments,netDepreciationandamortization5555(327,957)177,283(43,761)48,1885$$(2,538)28,657104,3065516,4495537,101 Cash flows from investing activities Purchases of marketable securities 5(4,434,749}${2,056,470)$(800,228) Maturities of marketable securities 51,733,043$580,795343,554 Sales of marketable securities 5296,867$36,6975 Purchases of property and equipment 5(132,590}$(79,972)5(38,084) Purchases of strategic investments 5(305,149)${13,000)5(3,000) \begin{tabular}{lrrrrr} Cash paid for acquisition, net of cash acquired & 5 & (3,501)$ & (26,486)5 & \\ Purchases of intangible assets & 5 & (13,018)$ & (5,843)5 & (141) \\ Other & 5 & & $ & 1,6595 & (1,569) \\ Net Cash used in investing activities & 5 & (2,859,097)$(1,562,420)5 & (499,468) \\ \hline \end{tabular} Cash Flows from financing activities Proceeds from issurance of common stock for employee stock purchase plan 559,331$38,433515,482 Proceeds from exercise of stock options, net of repurchases 514,404$28,55059,169 Proceeds from employee transactions to be remitted to employees and tax authorities $(40,004)$4,063548,547 Proceeds from follow-on public offering, net of underwriting discounts $$1,979,2065 Proceeds from:PO, nat of underwriting offering 5$542,492 Other Net cash provided by financing activities Net increase in cash Cash, beginning of year Cash, end of year \begin{tabular}{lrrrrr} 5 & 337 & $ & 5 & \\ \hline 5 & 34,068 & $2,050,277 & 5 & 615,690 \\ \hline 5 & (1,219,763) & $1,959,034 & 5 & 268,114 \\ 5 & 2,293,116 & $ & 334,062 & 5 & 65,968 \\ \hline 5 & 1,073,353 & $2,293,116 & 5 & 334,082 \\ \hline \end{tabular} Zoom Video Communications Consolidated Statements of Operations Zoom Video Communications Consolidated Balance Sheets (in thousands, except share and per share data) 1/31/20221/31/2021 Assets Current assets Cash and cash equivalents 51,062,82052,240,303 Marketable securities \$\$ 4,356,446 \$2,004,410 Accounts receivable 5419,673 S 294,703 Deferred contract acqusition costs, current S 199,266 S 136,630 Prepaid expenses and other current assets Total current assets \begin{tabular}{rrrr} 5 & 145,602 & 5 & 116,819 \\ \hline 5 & 6,183,807 & 54,792,865 \end{tabular} Deferred contract acqusition costs, noncurrent $164,714$157,262 Property and equipment, net $222,354 S 149,924 Operating lease right-of-use- \begin{tabular}{lrrrr} asset & $ & 95,955 & $ & 97,649 \\ Strategic Investments & $ & 367,814 & 5 & 15,668 \\ Goodwill & S & 27,607 & $ & 24,340 \\ Deferred tax assets & 5 & 382,296 & $ & 1,519 \\ Other assets, noncurrent & $ & 106,761 & 5 & 55,766 \\ \cline { 2 - 5 } Total Assets & $ & 7,551,318 & $5,297,993 \\ \hline \hline \end{tabular} Liabilities Current liabilities Accounts payable 5 \$ 7,841 \$ 8,664 Accured expenses and other current liabilities $430,415$393,018 \begin{tabular}{lllll} Deferred revenue, current & $ & 1,141,435 & $858,284 \\ \cline { 2 - 4 } Total current liabilities & $ & 1,579,691 & $1,259,966 \end{tabular} Deferred revenue, noncurrent &38,481$25,211 Operating lease liabilities, noncurrent $85,018$59,415 Other liabilities, noncurrent $68,110$561,634 Total liabilities $1,771,300$1,437,226 Shareholder's Equity Common Stock $299$292 Additional paid-in capital $3,749,514$3,187,168 Accumulated other comprehensive income $(17,902}5839 \begin{tabular}{lrrrr} Retained earnings & 5 & 2,048,107 & 5 & 672,468 \\ \cline { 2 - 5 } Total Stockholder's Equity & 5,780,018 & 53,860,767 \\ \hline \end{tabular} Total Liabilities and Stockholder's Equity 57,551,31855,297,993 Zoom Video communications Consolidated Statement of Cash Flows (in thousands, except share and per share data) 1/31/20221/31/20211/31/2020 Cash flows from operating activities cash provided by operating activities Stock-based compensation expense 5477,287$275,818573,109 income tax benefit from release of valuation allowanceAmortizationofdefferedcontractacqusitioncostsGainsonstrategicinwestments,netDepreciationandamortization5555(327,957)177,283(43,761)48,1885$$(2,538)28,657104,3065516,4495537,101 Cash flows from investing activities Purchases of marketable securities 5(4,434,749}${2,056,470)$(800,228) Maturities of marketable securities 51,733,043$580,795343,554 Sales of marketable securities 5296,867$36,6975 Purchases of property and equipment 5(132,590}$(79,972)5(38,084) Purchases of strategic investments 5(305,149)${13,000)5(3,000) \begin{tabular}{lrrrrr} Cash paid for acquisition, net of cash acquired & 5 & (3,501)$ & (26,486)5 & \\ Purchases of intangible assets & 5 & (13,018)$ & (5,843)5 & (141) \\ Other & 5 & & $ & 1,6595 & (1,569) \\ Net Cash used in investing activities & 5 & (2,859,097)$(1,562,420)5 & (499,468) \\ \hline \end{tabular} Cash Flows from financing activities Proceeds from issurance of common stock for employee stock purchase plan 559,331$38,433515,482 Proceeds from exercise of stock options, net of repurchases 514,404$28,55059,169 Proceeds from employee transactions to be remitted to employees and tax authorities $(40,004)$4,063548,547 Proceeds from follow-on public offering, net of underwriting discounts $$1,979,2065 Proceeds from:PO, nat of underwriting offering 5$542,492 Other Net cash provided by financing activities Net increase in cash Cash, beginning of year Cash, end of year \begin{tabular}{lrrrrr} 5 & 337 & $ & 5 & \\ \hline 5 & 34,068 & $2,050,277 & 5 & 615,690 \\ \hline 5 & (1,219,763) & $1,959,034 & 5 & 268,114 \\ 5 & 2,293,116 & $ & 334,062 & 5 & 65,968 \\ \hline 5 & 1,073,353 & $2,293,116 & 5 & 334,082 \\ \hline \end{tabular}