2022

BASE YEAR
EBIT GROWTH RATE 92.81%
EBIT 2,139,736,771
TAX RATE 22%
EBIT AFTER TAX = NOPAT = EBIT (1 - T) 1,668,994,681
LESS NET CAPITAL SPENDING - 318,984,576
LESS CHANGE IN NET WORKING CAPITAL - 70,244,112
FREE CASH FLOW TO THE FIRM 1,279,765,993
WEIGHTED AVERAGE COST OF CAPITAL
PRESENT VALUE OF FCFF
SUM OF PV Rp150,628,731,452.56
LESS DEBT - 7,480,619,728
ADD CASH AND CASH EQUIVALENTS 1,438,123,892
VALUE OF EQUITY 144,586,235,617
NUMBER OF SHARES OUTSTANDING 19,649,412
ESTIMATED INTRINSIC VALUE PER SHARE 7,358
SHARE PRICE 160
PRICE AS A PERCENTAGE OF INTRINSIC VALUE 2%
THE STOCK IS UNDERVALUE

CAPITAL EXPENDITURES 351,329,015

LESS DEPRECIATION AND AMORTIZATION EXPENSES 32,344,439
EQUALS NET CAPITAL SPENDING 318,984,576

CHANGE IN NET WORKING CAPITAL 70,244,112

 2023 2024 2025
1 2 3
83.82% 74.83% 65.84%
3,933,242,079 6,876,465,003 11,403,923,072
22% 22% 22%
3,067,928,822 5,363,642,702 8,895,059,996
- 586,354,160 - 1,025,119,680 - 1,700,057,509
- 129,122,003 - 225,743,271 - 374,372,428
2,352,452,659 4,112,779,751 6,820,630,059
15.5000% 15.5000% 15.5000%
Rp2,036,755,549.05 3,082,985,515 4,426,684,215
 2026 2027 2028
4 5 6
56.85% 47.86% 38.87%
17,887,095,965 26,448,010,691 36,728,698,937
22% 22% 22%
13,951,934,853 20,629,448,339 28,648,385,171
- 2,666,546,558 - 3,942,778,192 - 5,475,387,728
- 587,204,552 - 868,245,595 - 1,205,744,032
10,698,183,742 15,818,424,553 21,967,253,411
15.5000% 15.5000% 15.5000%
6,011,489,817 7,695,791,737 9,253,027,537
 2029 2030 2031
7 8 9
29.88% 20.89% 11.90%
47,703,887,299 57,670,300,962 64,534,632,247
22% 22% 22%
37,209,032,093 44,982,834,751 50,337,013,153
- 7,111,530,946 - 8,597,289,512 - 9,620,600,339
- 1,566,041,790 - 1,893,223,099 - 2,118,568,039
28,531,459,357 34,492,322,140 38,597,844,774
15.5000% 15.5000% 15.5000%
10,405,191,953 10,890,969,949 10,551,767,108
 2032
10 TERMINAL YEAR
2.91% 2.91%
66,414,643,965
22%
51,803,422,293
- 9,900,866,000
- 2,180,285,796
39,722,270,496 324,779,900,254
15.5000% 15.5000%
9,401,869,574 76,872,198,500
 CURRENT YEAR PRIOR YEAR
CURRENT ASSETS 3,636,178,310 3,034,403,543
LESS CASH 1,438,123,892 991,033,286
NON-CASH CURRENT ASSETS 2,198,054,418 2,043,370,257
CURRENT LIABILITIES 3,717,703,477 3,633,263,428
NON-CASH WORKING CAPITAL - 1,519,649,059 - 1,589,893,171
CHANGE IN NON-CASH WORKING 70,244,112

CASH, CURRENT YEAR 1,438,123,892

EBIT, PRIOR YEAR 1,109,773,043
EBIT, CURRENT YEAR 2,139,736,771

CAGR COMPUTED MANUALLY 92.81%

GROWTH RATE 92.81%
GROWTH RATE 92.81%
CAGR COMPUTED ON EXCEL 92.81%

CAGR = COMPOUND AVERAGE GROWTH RATE

TOTAL 32,344,439
DEPRECIATION EXPENSE 32,344,439
TOTAL 351,329,015
CAPEX 12,672,657
CAPEX 4,109,130
CAPEX 55,514,243
CAPEX 279,032,985
TOTAL DEB 7,480,619,728
DEBT 221,024,670
DEBT -
DEBT 2,471,993,215
DEBT 3,916,461,110
DEBT 871,140,733
SHARES 19,649,411,888
LESS TREASURY SHARES -
SHARES ISSUED AND OUTSTANDING 19,649,411,888

THOUSANDS 1,000
SHARES 19,649,412
SHARE PRICE 91.00
 INA GDP INA GDP
GROWTH RATE (US$ BN) YEAR
892.97 2011
2.79% 917.87 2012
-0.58% 912.52 2013
-2.38% 890.81 2014
-3.36% 860.85 2015
8.25% 931.88 2016
7.52% 1002 2017
0.20% 1004 2018
11.55% 1120 2019
-10.18% 1006 2020
18.29% 1190 2021

3.21% AGR
2.91% CAGR
 On 31 December 2020, XYZ leases new equipment on a 5-year lease contract, which XYZ
designates as a Right of Use (ROU) lease. The lease is payable semi-annually at 30 June and 3
December in the amount of $12.000, with the first payment occurring on 31 December 2020.
At the end of the lease contract, the ROU asset reverts to the lessor. The fair value of the
equipment at the inception of the lease of $100.000. The leased equipment is depreciated at
31 December over the 5-year lease term by using the straight-line method with zero salvage
value. The company ends its fiscal year at 31 December.

A. Compute the lease contract's implicit interest rate

9.60%

B. Complete a lease amortization table

C. Record the amortization of the lease liability over the course of thea lease contract
JOURNAL ENTRIES FOR AMORTIZATION OF THE LEASE LIABILITY
44196 DR. RIGHT OF USE ASSET
CR. LEASE LIABILITY

44196 DR. LEASE LIABILITY

CR. CASH

44377 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

44561 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

44742 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

44926 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

45107 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

45291 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

45473 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

45657 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

45838 DR. INTEREST EXPENSE

DR. LEASE LIABILITY
CR. CASH

D. Record the depreciation expense of the Right of Use Asset over the course of the lease contract

ADJUSTING ENTRIES FOR DEPRECIATION OF THE RIGHT OF USE ASSET

44196 NO ADJUSTING ENTRY FOR DEPRECIATION EXPENSE
 44561 DR. DEPRECIATION EXPENSE
CR. ACCUMULATED DEPRECIATION

44926 DR. DEPRECIATION EXPENSE

CR. ACCUMULATED DEPRECIATION

45291 DR. DEPRECIATION EXPENSE

CR. ACCUMULATED DEPRECIATION

45657 DR. DEPRECIATION EXPENSE

CR. ACCUMULATED DEPRECIATION

46022 DR. DEPRECIATION EXPENSE

CR. ACCUMULATED DEPRECIATION

E. Record the journal entry to rever the right of use asset to the lessor at the end of the lease contract

F. Present proof of the present value of the lease payment

ease contract, which XYZ
emi-annually at 30 June and 31
urring on 31 December 2020.
ssor. The fair value of the
equipment is depreciated at
e method with zero salvage

FAIR VALUE OF THE ROU ASSET

SEMI ANNUAL LEASE PAYMENTS

NUMBER OF PERIODS

IMPLICIT INTEREST RATE PER ANNUM

nper
pmt
pv
[fv]
type
guess
PROOF
DATE PERIOD FUTURE VALUE
31-Dec-20
31-Dec-20 0 84,750
30-Jun-21 1 84,750
31-Dec-21 2 84,750
30-Jun-22 3 84,750
31-Dec-22 4 84,750
30-Jun-23 5 84,750
31-Dec-23 6 84,750
30-Jun-24 7 84,750
31-Dec-24 8 84,750
30-Jun-25 9 84,750
847,500
 692,500
692,500

84,750
84,750

29,181
55,569
84,750

26,513
58,237
84,750

23,716
61,034
84,750

20,786
63,964
84,750

17,715
67,035
84,750

14,496
70,254
84,750

11,123
73,627
84,750

7,588
77,162
84,750

3,883
80,867
84,750

he lease contract
 138500
138500

138500
138500

138500
138500

138500
138500

138500
138500

of the lease contract

 LEASE AMORTIZATION SCHEDULE - LESSEE
692,500 DATE PAID INTEREST EXPENSE
31-Dec-20
84,750 31-Dec-20 84,750 -
30-Jun-21 84,750 29,181
10 31-Dec-21 84,750 26,513
30-Jun-22 84,750 23,716
9.60% 31-Dec-22 84,750 20,786
=RATE(I12;I10;-I8;0;1;0)*2 30-Jun-23 84,750 17,715
10 31-Dec-23 84,750 14,496
12,000 30-Jun-24 84,750 11,123
- 100,000 31-Dec-24 84,750 7,588
- 30-Jun-25 84,750 3,883
1
- TOTAL 847,500 155,000

PRESENT VALUE

84,750
80,867
77,162
73,627
70,254
67,035
63,964
61,034
58,237
55,569
692,500 TOTAL
LIABILITY REDUCTION LEASE LIABILITY JOURNAL ENTRIES FOR AMORTIZATION OF THE LEASE LIABILITY
$ 692,500 31-Dec-20 DR. RIGHT OF USE ASSET 692,500
84,750 $ 607,750 CR. LEASE LIABILITY 692,500
55,569 $ 552,181
58,237 $ 493,943 31-Dec-20 DR. LEASE LIABILITY 84,750
61,034 $ 432,910 CR. CASH 84,750
63,964 $ 368,946
67,035 $ 301,911 30-Jun-21 DR. INTEREST EXPENSE 29,181
70,254 $ 231,657 DR. LEASE LIABILITY 55,569
73,627 $ 158,030 CR. CASH 84,750
77,162 $ 80,867
80,867 $ 0 31-Dec-21 DR. INTEREST EXPENSE 26,513
DR. LEASE LIABILITY 58,237
692,500 CR. CASH 84,750

30-Jun-22 DR. INTEREST EXPENSE 23,716

DR. LEASE LIABILITY 61,034
CR. CASH 84,750

31-Dec-22 DR. INTEREST EXPENSE 20,786

DR. LEASE LIABILITY 63,964
CR. CASH 84,750

30-Jun-23 DR. INTEREST EXPENSE 17,715

DR. LEASE LIABILITY 67,035
CR. CASH 84,750

31-Dec-23 DR. INTEREST EXPENSE 14,496

DR. LEASE LIABILITY 70,254
CR. CASH 84,750

30-Jun-24 DR. INTEREST EXPENSE 11,123

DR. LEASE LIABILITY 73,627
CR. CASH 84,750
31-Dec-24 DR. INTEREST EXPENSE 7,588
DR. LEASE LIABILITY 77,162
CR. CASH 84,750

30-Jun-25 DR. INTEREST EXPENSE 3,883

DR. LEASE LIABILITY 80,867
CR. CASH 84,750
ASE LIABILITY ADJUSTING ENTRIES FOR DEPRECIATION OF THE RIGHT OF USE ASSET
31-Dec-20

31-Dec-21

31-Dec-22

31-Dec-23

31-Dec-24

31-Dec-25
NO ADJUSTING ENTRY FOR DEPRECIATION EXPENSE

DR. DEPRECIATION EXPENSE $ 138,500

CR. ACCUMULATED DEPRECIATION $ 138,500

DR. DEPRECIATION EXPENSE $ 138,500

CR. ACCUMULATED DEPRECIATION $ 138,500

DR. DEPRECIATION EXPENSE $ 138,500

CR. ACCUMULATED DEPRECIATION $ 138,500

DR. DEPRECIATION EXPENSE $ 138,500

CR. ACCUMULATED DEPRECIATION $ 138,500

DR. DEPRECIATION EXPENSE $ 138,500

CR. ACCUMULATED DEPRECIATION $ 138,500
JOURNAL ENTRY TO REVERT THE ROU ASSET TO THE LESSOR

31-Dec-25 DR. ACCUMULATED DEPRECIATION

CR. RIGHT OF USE ASSET
692,500
692,500
a) XYZ Co. collects on its trade receivable
Dr Cash
Cr Account Receivable

b) XYZ Co. records an adjusting entry for accrued salaries expense

Dr Salaries Expense
Cr Salaries Payable

Dr Salaries Payable
Cr Salaries Expense

c) XYZ Co. receives an advance from a customer

Dr Cash
Cr Advance Payment

d) XYZ Co. purchases supplies on credit

Dr Supplies
Cr Accounts Payable
A. PBV 0.30
SHARE PRICE 160
BOOK VALUE PER SHARE 542
BOOK VALUE 10,642,624,565
SHARES OUTSTANDING 19,649,412
NUMBER OF SHARES 19,649,411,888
TREASURY SHARES -
SHARES ISSUED & OUTSTAN 19,649,411,888
IN THOUSANDS 1,000

B. DER 70%
TOTAL DEBT 7,480,619,728
EQUITY 10,642,624,565

C. EV/EBITDA 4.23
ENTERPRISE VALUE 9,186,401,738
MARKET VALUE OF EQUITY 3,143,905,902
BOOK VALUE OF DEBT 7,480,619,728
CASH & CASH EQUIVALENT 1,438,123,892
SHARE PRICE 160
SHARE OUTSTANDING 19,649,412
EBITDA 2,172,081,210
EBIT 2,139,736,771
DA 32,344,439

D. PER 2.89
SHARE PRICE 160.00
EPS 55.27
DAMODARAN'S SPREADSHEET TO COMPUTE WACC
Inputs COST OF CAPITAL
Company
Country of incorporation INDONESIA
Industry (Country)
Industry (Global)
Do you have operating leases? YES
If synthetic rating, input the type of company 1

MARKET VALUE OF EQUITY = MARKET CAPITALIZATION 86,356,285

BOOK VALUE OF DEBT 66,240,304

CAPITAL = EQUITY + DEBT 152,596,589

WEIGHT OF EQUITY 56.59%
WEIGHT OF DEBT 43.41%

WACC = WEIGHTED AVERAGE COST OF CAPITAL 23.8306%

COST OF EQUITY 29.64%

RISK FREE RATE 6.649%
BETA 2.54
ERP = EQUITY RISK PREMIUM 9.05%

COST OF DEBT AFTER TAX 16.26%

COST OF DEBT BEFORE TAX 20.85%
TAX RATE 22%