R/FCFE_Basic.R

In JancoS/EquityR: Common stock valuation methods. Including single stage DDM, multistage DDM and basic CF models. Package mainly builds on the tidyquant and finreportr packages.

#' @title FCFE_Basic
#' @description Basic valuation of a company based on the FCFE. The FCFE is calculated by adjusting the FCFF by Net Borrowings
#' @param Ticker Ticker of the company to be evaluated
#' @param Req Required rate of return
#' @param year Year when latest results is available
#' @param growth_rate The growth rate g
#' @export
#' @return FCFE_Value

FCFE_Basic <- function(Ticker, Req, year, growth_rate) {

  # Get the required data

  CF_Data <- GetCashFlow(Ticker, year)

  CF_Data <- CF_Data %>%
    mutate(What_Year = year(EndDate)) %>%
    filter(What_Year == year)

  MData <- tq_get(Ticker, get = "key.ratios") %>%
    filter(section == "Financials") %>%
    select(data) %>% unnest()

  # Get the Net_Borrowings from the cash flow data

  NB <- CF_Data %>%
    filter(Metric == "Proceeds from Issuance of Long-term Debt") %>% pull(Amount)

  # Calculate FCFE from the FCFF

  FCFF <- MData %>%
    filter(category == "Free Cash Flow USD Mil")

  FCFF_latest <- FCFF %>%
    filter(row_number() == nrow(FCFF)) %>% pull(value)

  FCFE_latest <- FCFF_latest + NB

  # Calculate Value

  FCFE_Value <- (FCFE_latest*(1+growth_rate))/(Req - growth_rate)

  return(FCFE_Value)

}