• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Quaterly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Managing Editor: Ms. Shira. W. Lu
    • Abstracting/ Indexing:  Crossref, Electronic Journals Library , EBSCO
    • E-mail: ijtef.editorial.office@gmail.com
HOME > Archive > 2023 > Volume 14 Number 2 (May 2023) >
IJTEF 2023 Vol.14(2): 29-34 ISSN: 2010-023X
DOI: 10.18178/ijtef.2023.14.2.752

The Financial Modeling for Airbus by Free Cash Flow Model

Bofan Liu

Abstract—An investment advice report for the company Airbus is presented in this document. The Free Cash Flow (FCF) model was the approach that carrying out this research. Various technologies provide Airbus with higher external value, while FCF brings Airbus with internal value. The report forecasts the next four years based on the analysis of the economic data of the previous four years. To make a prediction, the external value factors of the aircraft industry operated by Airbus are found. In addition, the FCF variable was evaluated, and the results showed that as of December 31, 2021, the equity value was 8.8 million, and in Weighted Average Cost of Capital , growth would affect the company's value and value of equity per share. This study also provides a scenario analysis that illustrates two scenarios: bullish and bearish, and their relative impact on the company's value and equity value. Then, the price earnings ratio, EV / EBIT, are used for comparative evaluation. The results show that Airbus is undervalued compared to its competitors. This study points out that the results of FCF method and relative valuation method can provide reference to investment recommendations of persons and institutions.

Index Terms—Free cash flow, financial modeling, airbus

Bofan Liu is with the School of Economics and Finance, Queen Mary University of London, London, E1 4NS UK (e-mail: liubf7301@163.com).

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Cite: Bofan Liu, "The Financial Modeling for Airbus by Free Cash Flow Model," International Journal of Trade, Economics and Finance vol.14, no.2, pp. 29-34, 2023.

Copyright © 2023 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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