00:01
First, i want to estimate future sales and ebit for 2010.
00:07
The current sales in 2009 is $19 .2 billion with a 10 % expected growth rate.
00:12
So the sales in 2010 would be equal to 19 .2 times 1 plus 0 .10.
00:25
That would be increasing 10%, and that's $21 .12 billion.
00:34
The current ebit margin is 10 % and the sales in 2010 was $21 .12 billion.
00:41
So the ebit in 2010 would be 10 % of $21 .12.
01:02
So that's $2 .112 billion.
01:05
Now we calculate the free cash flow for 2010.
01:08
The tax rate is 24%.
01:12
And so the net operating profit after tax or nopat would be the ebit times 1 minus the tax rate, which would be 2 .112 times 0 .76, and that's 1 .60432 billion.
01:34
Assuming that depreciation changes in working capital and capital expenditures are negligible for simplicity, this is a simplification and real analysis would need these details.
01:47
But the fcf is about equal to the nopat, which is $1 .60432 billion.
01:58
Then we determine the enterprise value...
