Discounted Cash Flow (DCF) Analysis Unlevered

Microsoft Corporation (MSFT)

$248.16

+0.16 (+0.06%)

All numbers are in Millions, Currency in USD

Stock DCF: 209.49 | 248.16 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	110,360	125,843	143,015	168,088	198,270	229,578.28	265,830.36	307,806.91	356,411.86	412,691.88
Revenue (%)
EBITDA	49,468	58,056	68,423	85,134	100,239	110,200.51	127,601.98	147,751.26	171,082.26	198,097.39
EBITDA (%)
EBIT	39,207	46,374	55,627	73,448	85,779	91,019.96	105,392.67	122,034.94	141,305.15	163,618.26
EBIT (%)
Depreciation	10,261	11,682	12,796	11,686	14,460	19,180.56	22,209.30	25,716.32	29,777.11	34,479.13
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	133,768	133,819	136,527	130,334	104,749	208,173.63	241,045.77	279,108.65	323,181.93	374,214.71
Total Cash (%)
Account Receivables	26,481	29,524	32,011	38,043	44,261	52,709.08	61,032.23	70,669.66	81,828.91	94,750.29
Account Receivables (%)
Inventories	2,662	2,063	1,895	2,636	3,742	4,055.29	4,695.65	5,437.12	6,295.68	7,289.82
Inventories (%)
Accounts Payable	8,617	9,382	12,530	15,163	19,000	19,573.15	22,663.89	26,242.68	30,386.60	35,184.86
Accounts Payable (%)
Capital Expenditure	-11,632	-13,925	-15,441	-20,622	-23,886	-26,042.43	-30,154.72	-34,916.37	-40,429.92	-46,814.10
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 248.16
Beta	0.926
Diluted Shares Outstanding	7,540
Cost of Debt
Tax Rate	13.11
After-tax Cost of Debt	2.93%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.891
Total Debt	61,270
Total Equity	1,871,126.40
Total Capital	1,932,396.40
Debt Weighting	3.17
Equity Weighting	96.83
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	110,360	125,843	143,015	168,088	198,270	229,578.28	265,830.36	307,806.91	356,411.86	412,691.88
EBITDA	49,468	58,056	68,423	85,134	100,239	110,200.51	127,601.98	147,751.26	171,082.26	198,097.39
EBIT	39,207	46,374	55,627	73,448	85,779	91,019.96	105,392.67	122,034.94	141,305.15	163,618.26
Tax Rate	54.57%	10.18%	16.51%	13.83%	13.11%	21.64%	21.64%	21.64%	21.64%	21.64%
EBIAT	17,812.67	41,652.53	46,444.29	63,292.63	74,530.47	71,323.86	82,586.42	95,627.42	110,727.68	128,212.39
Depreciation	10,261	11,682	12,796	11,686	14,460	19,180.56	22,209.30	25,716.32	29,777.11	34,479.13
Accounts Receivable	-	-3,043	-2,487	-6,032	-6,218	-8,448.08	-8,323.15	-9,637.43	-11,159.25	-12,921.38
Inventories	-	599	168	-741	-1,106	-313.29	-640.36	-741.48	-858.56	-994.13
Accounts Payable	-	765	3,148	2,633	3,837	573.15	3,090.74	3,578.79	4,143.91	4,798.26
Capital Expenditure	-11,632	-13,925	-15,441	-20,622	-23,886	-26,042.43	-30,154.72	-34,916.37	-40,429.92	-46,814.10
UFCF	16,441.67	37,730.53	44,628.29	50,216.63	61,617.47	56,273.77	68,768.24	79,627.25	92,200.97	106,760.17
WACC
PV UFCF						52,235.93	59,253.58	63,687.14	68,452.43	73,574.27
SUM PV UFCF										317,203.35

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.73
Free cash flow (t + 1)	108,895.38
Terminal Value	1,900,442.88
Present Value of Terminal Value	1,309,699.08

Intrinsic Value

Enterprise Value	1,626,902.42
Net Debt	47,339
Equity Value	1,579,563.42
Shares Outstanding	7,540
Equity Value Per Share	209.49