Discounted Cash Flow (DCF) Analysis Unlevered

Franchise Group, Inc. (FRG)

$30.94

+0.39 (+1.28%)

All numbers are in Millions, Currency in USD

Stock DCF: -457,686.91 | 30.94 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	173.99	174.87	132.55	2,152.50	3,255.20	15,881.34	77,481.19	378,011.73	1,844,226.69	8,997,530.48
Revenue (%)
EBITDA	31.65	19.12	12.66	131.39	536.13	1,945.36	9,490.92	46,303.86	225,905.17	1,102,136.03
EBITDA (%)
EBIT	23.32	7.66	-0.97	68.84	463.36	1,095.39	5,344.16	26,072.86	127,203.12	620,592.88
EBIT (%)
Depreciation	8.32	11.45	13.63	62.54	72.77	849.96	4,146.75	20,230.99	98,702.05	481,543.15
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	16.43	18.52	22.98	151.50	292.71	1,696.24	8,275.55	40,374.37	196,976.69	961,001.04
Total Cash (%)
Account Receivables	74.48	66.82	67.70	90.61	118.70	4,445.32	21,687.62	105,808.57	516,214.10	2,518,482.20
Account Receivables (%)
Inventories	-	-	-	302.31	673.17	2,757.34	13,452.38	65,630.86	320,196.89	1,562,162.22
Inventories (%)
Accounts Payable	36.10	32.43	30.95	449.47	679.72	3,316.20	16,178.92	78,933	385,094.78	1,878,783.16
Accounts Payable (%)
Capital Expenditure	-15.07	-8.31	-3.17	-41.52	-46.96	-609.15	-2,971.88	-14,499.07	-70,737.40	-345,110.45
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 30.94
Beta	1.710
Diluted Shares Outstanding	40.96
Cost of Debt
Tax Rate	-129.62
After-tax Cost of Debt	5.12%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.590
Total Debt	2,600.07
Total Equity	1,267.43
Total Capital	3,867.50
Debt Weighting	67.23
Equity Weighting	32.77
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	173.99	174.87	132.55	2,152.50	3,255.20	15,881.34	77,481.19	378,011.73	1,844,226.69	8,997,530.48
EBITDA	31.65	19.12	12.66	131.39	536.13	1,945.36	9,490.92	46,303.86	225,905.17	1,102,136.03
EBIT	23.32	7.66	-0.97	68.84	463.36	1,095.39	5,344.16	26,072.86	127,203.12	620,592.88
Tax Rate	37.34%	96.99%	46.03%	181.33%	-129.62%	46.41%	46.41%	46.41%	46.41%	46.41%
EBIAT	14.62	0.23	-0.52	-55.99	1,063.99	586.98	2,863.74	13,971.47	68,163.39	332,552.48
Depreciation	8.32	11.45	13.63	62.54	72.77	849.96	4,146.75	20,230.99	98,702.05	481,543.15
Accounts Receivable	-	7.67	-0.89	-22.91	-28.09	-4,326.62	-17,242.30	-84,120.95	-410,405.53	-2,002,268.10
Inventories	-	-	-	-	-370.86	-2,084.17	-10,695.04	-52,178.48	-254,566.03	-1,241,965.33
Accounts Payable	-	-3.67	-1.47	418.51	230.26	2,636.48	12,862.72	62,754.08	306,161.78	1,493,688.37
Capital Expenditure	-15.07	-8.31	-3.17	-41.52	-46.96	-609.15	-2,971.88	-14,499.07	-70,737.40	-345,110.45
UFCF	7.87	7.37	7.58	360.64	921.10	-2,946.52	-11,036	-53,841.96	-262,681.74	-1,281,559.87
WACC
PV UFCF						-2,747.59	-9,596.18	-43,656.65	-198,610.71	-903,555.58
SUM PV UFCF										-1,158,166.71

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.24
Free cash flow (t + 1)	-1,307,191.07
Terminal Value	-24,946,394.43
Present Value of Terminal Value	-17,588,295.69

Intrinsic Value

Enterprise Value	-18,746,462.40
Net Debt	2,307.35
Equity Value	-18,748,769.75
Shares Outstanding	40.96
Equity Value Per Share	-457,686.91