NGX Valuation Lab · Tools & assumptions

What has to go right?

Price is observable. Value is an argument. Make the assumptions explicit, then see how much room they leave.

Illustrative models, not company forecasts. Use a dated report and your own assumptions. This unlevered cash-flow model is for operating businesses, not bank valuation. Inputs stay in your browser and are not uploaded to an account.

01 · DISCOUNTED CASH FLOW

Build the cash-flow case.

Model currencyChanges the unit label, not the input numbers.

Starting revenue (millions)Last full year; use one currency throughout.Annual revenue growth (%)EBIT margin (%)Cash tax rate (%)D&A / revenue (%)Capex / revenue (%)Working capital / new revenue (%)Discount rate / WACC (%)Must exceed terminal growth.Terminal growth (%)Net debt (millions)Debt less cash. Negative means net cash.Diluted shares (millions)Match diluted shares to the equity claim.Reference price per shareYour dated input; no live feed.

YOUR ASSUMPTIONS IMPLY

₦10.7

-10.9% versus your reference price

Enterprise value (m)1,169.7

Net debt (m)100

Equity value (m)1,069.7

Terminal value / EV54.3%

Margin of safety-12.2%

No automatic buy signal. The output is only as defensible as the inputs.

Five-year operating forecast · NGN millions
Year	Revenue	EBIT	Cash tax	D&A	Capex	Δ working capital	FCFF	Present value
1	1,100	275	82.5	44	77	15	144.5	122.5
2	1,210	302.5	90.8	48.4	84.7	16.5	159	114.2
3	1,331	332.8	99.8	53.2	93.2	18.2	174.8	106.4
4	1,464.1	366	109.8	58.6	102.5	20	192.3	99.2
5	1,610.5	402.6	120.8	64.4	112.7	22	211.6	92.5

Calculation method & limits

FCFF = EBIT - cash tax + D&A - capex - change in working capital. Each annual cash flow is discounted at WACC. Terminal value = year-five FCFF × (1 + terminal growth) ÷ (WACC - terminal growth), discounted five years. Equity value = enterprise value - net debt. Divide by diluted shares for value per share.

Constant ratios, year-end discounting and a perpetuity terminal value simplify reality. This model excludes minorities, pensions, associates, tax losses and separate lease adjustments. Adjust net debt and cash flows consistently before interpreting it.

Sensitivity · per-share value · discount rate versus terminal growth
WACC / terminal growth	2%	3%	4%
16%	₦11.96	₦12.6	₦13.35
18%	₦10.24	₦10.7	₦11.22
20%	₦8.92	₦9.25	₦9.62

02 · SCENARIO COMPARISON

Give the counterargument a number.

Bear and bull override revenue growth, EBIT margin and discount rate. Every other assumption follows the DCF above. Labels describe cases, not guaranteed outcomes.

BearRevenue growth (%)EBIT margin (%)Discount rate (%)₦6.8Value per share

Base

Uses all inputs from the DCF above.

₦10.7Value per share

BullRevenue growth (%)EBIT margin (%)Discount rate (%)₦16.72Value per share

03 · MARGIN OF SAFETY

Leave room to be wrong.

Fair value per share (NGN)Reference price (NGN)Your risk haircut (%)A discretionary reduction to fair value, not a calibrated probability.

MARGIN OF SAFETY AFTER YOUR HAIRCUT

11.1%

Adjusted fair value: ₦13.5

Price is below your adjusted value.

Margin of safety = 1 - price ÷ adjusted fair value. It differs from potential upside, which divides by price. Neither is an instruction to trade.