The Application Of DCF Model in the Enterprise Value Assessment：A Case Study of Tesla, Inc

Chen Huang

doi:10.54254/2754-1169/6/20220172

Research Article

Open access

Published on 27 April 2023

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Huang,C. (2023). The Application Of DCF Model in the Enterprise Value Assessment：A Case Study of Tesla, Inc. Advances in Economics, Management and Political Sciences,6,148-153.

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The Application Of DCF Model in the Enterprise Value Assessment：A Case Study of Tesla, Inc

Chen Huang *^,1,

¹ University of liverpool, Liverpool, United Kingdom, L69 3BX

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/6/20220172

Abstract

With the rapid development of today's society and economy, more and more public investors are not satisfied with bank financial products, which have lower value-added, but turn their attention to the capital market. The quantitative technique of DCF model combined with qualitative analysis to assess the intrinsic value of enterprises provides an effective reference for public investors. Tesla, a company that produces new energy vehicles, has shown rapid growth in recent years and is suitable for valuation using DCF models. This paper predicts the growth rate of Tesla's operating income in the next five years based on its historical financial data, and uses the percentage of sales method combined with qualitative analysis to calculate the present value of the enterprise's free cash flow in the next five years, and also calculates the present value of the enterprise's future perpetuity based on the assumption of the enterprise's going concern, and the two are added together to obtain the intrinsic value of Tesla Inc. as $5160.95 billion. The total market value of Tesla Inc. on November 22, 2022 (valuation point in time) is $5365.34 billion (data source: https://www.msn.cn). The intrinsic value of the enterprise is lower than the market price, and investors are advised not to buy.

Keywords

DCF Model, Discounted Free Cash Flow, Enterprise Value Assessment, Tesla Inc

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References

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Cite this article

Huang,C. (2023). The Application Of DCF Model in the Enterprise Value Assessment：A Case Study of Tesla, Inc. Advances in Economics, Management and Political Sciences,6,148-153.

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About volume

Volume title: Proceedings of the 2022 International Conference on Financial Technology and Business Analysis (ICFTBA 2022), Part 2

Conference website: http://www.icftba.org

ISBN：978-1-915371-23-2(Print) / 978-1-915371-24-9(Online)

Conference date: 16 December 2022

Editor：Javier Cifuentes-Faura, Canh Thien Dang

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.6

ISSN：2754-1169(Print) / 2754-1177(Online)

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