# Estimating the Value of a Company – Fiat Chrysler Automobiles (FCA) – in Excel Calculate :  Asset valuation approach :   For this method, we determine t

Calculate :

• Asset valuation approach :   For this method, we determine the company’s book value or net asset value derived from the account balances on the balance sheet by taking the sum of the value of the assets and then deducting the total liabilities to arrive at a value for net assets.

• Hybrid valuation approach: For this method we can combine the asset valuation approach with the income approach to arrive at an estimated value. This rather comprehensive estimate can be a challenge, as it ideally considers all aspects of a business, both tangible and intangible, and may be very different from the market value. This might also be referred to as estimating the company’s intrinsic value.

## Sheet1

 1.Assets valuation approach : Net Assets method = Total Assets- Total liabilities Net Assets per share = Net Assets / No. of outstanding share Fiat Chrysler Automobiles N.V ( in € million ) 1 euro equals 1.13 United States Dollar as of 02.01.2022 in \$ million Years 2016 2017 2018 2019 2020 Years 2016 2017 2018 2019 2020 Total Assests 104343 96299 96873 98044 99730 Total Assests \$117,907.59 \$108,817.87 \$109,466.49 \$110,789.72 \$112,694.90 Total Liability 49469 47269 71970 63369 73869 Total Liability \$55,899.97 \$53,413.97 \$81,326.10 \$71,606.97 \$83,471.97 No.of outstanding 1526 1556 1568 1571 1572 No.of outstanding \$1,724.38 \$1,758.28 \$1,771.84 \$1,775.23 \$1,776.36 3. Hybrid valuation approach ( estimating the company’s intinsic value ) Home Depot ( as an example ) Fiat can be done same way but for 5 years Intrinsic Value of a Company Future cash Flow in million dollars Year 2018 2017 2016 You will be using the most recent three years 2018,2019 and 2020 Cash from Operations 13,038 12031 9783 Capital Expenditure -2463 -2275 -1621 Please note you may sometime have negative free cash flows. In that case you will not use FCF 10,575 9756 8162 this method. This will be a good justification for not selecting this method. Of course you need to show calculations. You can use arbitrary growth rate and justify it OR Compute Compound Annual Growth Rate (CAGR) CAGR= (EV/BV)^(1/N)-1 0.0901709251 Compute Projected FCF using the CAGR Year 1 2 3 4 5 Projected FCF 11526.75 12564.1575 13694.931675 14927.47552575 16270.9483230675 PV of Projected FCF Year 1 2 3 4 5 Total Projected FCF 11526.75 12564.1575 13694.931675 14927.47552575 16270.9483230675 Pvf at 10% 0.90909 0.8264 0.75132 0.68301 0.62092 PV 10478.8531575 10383.019758 10289.276066061 10195.6150588425 10102.9572327591 Toal PV of projected FCF \$ 51,449.72 Terminal Value = PV of FCf of the year 5 X 10 (It is subjective. Generally take 10 or 12 times of the project FCF of 5th year) Terminal Value 10102.9572X10 101,029.57 Total of PV of projected FCF and Terminal Value 152,479.29 Cash and Cash Equivalent 1,778 Intrinsic Value of company ( Total PV of Projected FCF+ Terminal Value+Cash and Cash Equivalents) 154,257.29 154.2572936008 Billions Inrinsic Value of a share No. outstanding shares 1,103,903,507 1,104 millions 139.725809421 per share intrinsic value Or round it to \$140 per share