Company Valuation Under IFRS : Interpreting and Forecasting ...

Chapter Five – Valuing a company
Share issues/(buybacks)
Debt and cash (£)
2002 2003 2004 2005 2006 2007 2008
Par value 0.1 0.1 0.1 0.1 0.1 0.1 0.1
per share
Share price 9.8 13.0 13.0 13.0 13.0
Share premium -0.1 -0.1 9.7 12.9 12.9 12.9 12.9
Share issue (£) 2,940,000 0 0 0 0
Shares issued 30,000,000 0 0 0 0
Share buyback (£) 0 0 0 0 0
Shares bought 0 0 0 0 0
2001 2002 2003 2004 2005 2006 2007 2008
Opening long term debt 0 800,000 800,000 800,000 800,000
Mandatory repayments 0 0 0 0 0
Discretionary issues/ 800,000 0 0 0 0
repayments
Closing long term debt 86,954 392,045 0 800,000 800,000 800,000 800,000 800,000
LTD/Operating capital -317.0% 45.5% 0.0% 57.4% 45.2% 43.8% 47.0% 46.4%
Interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Interest paid 0 28,000 56,000 56,000 56,000 56,000
Opening short term debt 8,360 0 0 0 0
Change in short term debt (8,360) 0 0 0 0
Closing short term debt 76,298 271,866 8,360 0 0 0 0 0
STD/Operating capital -278.2% 31.5% 1.1% 0.0% 0.0% 0.0% 0.0% 0.0%
Interest rate 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Interest paid 251 251 0 0 0 0
Opening cash 491,230 2,229,795 1,969,326 2,919,676 4,852,131
Change in cash 1,738,565 (260,469) 950,349 1,932,456 2,220,957
Closing cash 0 2,263,176 491,230 2,229,795 1,969,326 2,919,676 4,852,131 7,073,088
Interest rate 4.0% 4.0% 4.0% 4.0% 4.0%
Interest received 89,192 83,982 97,780 155,436 238,504
Net interest 60,941 27,982 41,780 99,436 182,504
Net debt (482,870) (1,429,795) (1,169,326) (2,119,676) (4,052,131)
Interest rate (opening balance) 12.6% 2.0% 3.6% 4.7% 4.5%
Capitalisation routine (£)
2001 2002 2003 2004 2005 2006 2007 2008
Amortisation period 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0
Opening gross intangibles 0 79,290 819,394 1,598,760 2,378,126 3,078,202 3,117,464 3,117,464
R&D spend 79,290 740,104 779,366 779,366 779,366 779,366 779,366 779,366
Retirement 0 0 0 0 (79,290) (740,104) (779,366) (779,366)
Closing gross intangibles 79,290 819,394 1,598,760 2,378,126 3,078,202 3,117,464 3,117,464 3,117,464
Amortisation 0 15,858 163,879 319,752 475,625 615,640 623,493 623,493
Retirement 0 0 0 0 (79,290) (740,104) (779,366) (779,366)
Cumulative amortisation 0 15,858 179,737 499,489 895,824 771,360 615,487 459,614
Closing net intangibles 79,290 803,536 1,419,023 1,878,637 2,182,378 2,346,104 2,501,977 2,657,850
235