20210818 High Growth Valuations.xlsx

	B	C	D	E	F	G	H	I	J	K	L	M	N	O
1		Year		0	1	2	3	4	5	6	7	8	9	10
2	High Growth Companies			Base	30%	30%	30%	30%	30%	30%	30%	30%	30%	30%
3		Revenues		100	130.0	169.0	219.7	285.6	371.3	482.7	627.5	815.7	1,060	1,379
4		CoGS	40%	40	52.0	67.6	87.9	114.2	148.5	193.1	251.0	326.3	424.2	551.4
5		Gross margin	60%	60	78.0	101.4	131.8	171.4	222.8	289.6	376.5	489.4	636.3	827.2
6		SGA	20%	20	26.0	33.8	43.9	57.1	74.3	96.5	125.5	163.1	212.1	275.7
7		Operating margins	40%	40	52.0	67.6	87.9	114.2	148.5	193.1	251.0	326.3	424.2	551.4
8		Interest		10	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0
9		EBT	30%	30	42.0	57.6	77.9	104.2	138.5	183.1	241.0	316.3	414.2	541.4
10		Taxes	25%	7.5	10.5	14.4	19.5	26.1	34.6	45.8	60.2	79.1	103.5	135.4
11		Net income	23%	22.5	31.5	43.2	58.4	78.2	103.9	137.3	180.7	237.2	310.6	406.1
12
13		PE multiples		100x	85x	72x	61x	52x	44x	38x	32x	27x	23x	20x
14		Decline		-15%
15		EV		2,250	2,678	3,121	3,587	4,081	4,610	5,178	5,794	6,464	7,195	7,995
16		High Growth Annual Return			19.0%	16.6%	14.9%	13.8%	12.9%	12.3%	11.9%	11.6%	11.3%	11.1%
17
18
19		Year		0	1	2	3	4	5	6	7	8	9	10
20	Value/Moderate growth			Base	8%	8%	8%	8%	8%	8%	8%	8%	8%	8%
21		Revenues		100	108.0	116.6	126.0	136.0	146.9	158.7	171.4	185.1	199.9	215.9
22		CoGS	40%	40	43.2	46.7	50.4	54.4	58.8	63.5	68.6	74.0	80.0	86.4
23		Gross margin	60%	60	64.8	70.0	75.6	81.6	88.2	95.2	102.8	111.1	119.9	129.5
24		SGA	20%	20	21.6	23.3	25.2	27.2	29.4	31.7	34.3	37.0	40.0	43.2
25		Operating margins	40%	40	43.2	46.7	50.4	54.4	58.8	63.5	68.6	74.0	80.0	86.4
26		Interest		10	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0	10.0
27		EBT	30%	30	33.2	36.7	40.4	44.4	48.8	53.5	58.6	64.0	70.0	76.4
28		Taxes	25%	7.5	8.3	9.2	10.1	11.1	12.2	13.4	14.6	16.0	17.5	19.1
29		Net income	23%	22.5	24.9	27.5	30.3	33.3	36.6	40.1	43.9	48.0	52.5	57.3
30
31		PE multiples		20x	20x	20x	20x	20x	20x	20x	20x	20x	20x	20x
32		Decline		0%
33		EV		450	498	550	606	666	732	802	878	961	1,049	1,145
34		Value Annual Return			10.7%	10.4%	10.2%	10.0%	9.8%	9.6%	9.5%	9.4%	9.2%	9.1%
35
36
37		Author: Senith Mathews
38		Source: GraduteTutor.com
39		Link: https://www.graduatetutor.com/corporate-finance-tutoring/growth/can-100x-pe-ratio-valuations-be-justified/
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100