Waterfall Depreciation Model

When projecting PP&E for a Company, one must be careful about all the assumptions involved in CapEx and Depreciation expense.

Since Financial Modeling consists in keeping balance between reality and simplicity, I´ve developed a fully automated financial model that spreads out the depreciation expense related to CapEx made in the projection years. This helps a lot since a real Depreciation Expense Schedule has a direct impact in the Present Value of FCFs because of the "Tax Shield" associated to it and therefore an impact in the value of the company. Besides, this model helps the analyst take better assumptions regarding the terminal values and parameters related to PP&E, since it helps to get a grasp on how the PP&E will end up in the classic 5Y projection period.

If any is interested in this model, please sent an e-mail to lmiguelzuluaga@gmail.com or a private message in Linkedin. I´d be glad to share it with you.

Compound Interest

Diluted EPS: Convertible Debt Instruments

Necessary tweaks when calculating Diluted EPS for a company that has issued Convertible Debt Instruments.

Dividend Discount Model II: Gordon Growth Model

Dividend Discount Model: See how value is created when growth is expected. In this example a 3% growth expectation creates 47% more value. Further sensitivity analysis would show that value grows exponentially as g% increases.