I'm trying to create a DCF model for GlaxoSmithKline, but I'm struggling with some of the figures.

According to Shares Magazine the net profit for 2018 is £1,345m ((sharesmagazine.co.uk/shares/share/GSK/fundamentals)), however when I look at the actual GSK financial statement for 2018 (https://www.gsk.com/media/5344/financial-statements.pdf) I can see a profit after taxation of £4,406m (pg 140). The only mention of £1,345 is "share capital". Is net profit and share capital the same thing?

Capex, I've calculated to be 1796m (1,344 + 452 on pg 143). It seems unclear whether capex should include intangibles.

I'm also trying to get deprecation and amortisation, the best figure I've got for that is £1,856m (pg 154 the link above). The next figures I'm after are capex and working capital, the figure I've got for this is -5.564m, (16,927 current assets - 22,491 current liabilities, pg 141).

Having never done a DCF model before, I'm not sure if my figures are correct and would love to get some advice.


1 Answer 1


The net profit reported by Shares magazine is in fact the share capital as you have noticed. They are not the same thing. Net profit is income minus expenses. Share capital is the amount of capital raised through share issuance.

Some intangible assets may be covered by capex (e.g. R&D, software development, etc.)

On depreciation and amortization, your figure is further supported by note 36 which details them separately. Note 17 and 19 detail respectively depreciation (land / building and PP&E) and amortization (software, licenses / patents and brands).

  • Thank you, I believe the "net profit" for 2018 is 4,046. However profit attributale to shareholders is £3,623 (pg 140 on the income statement), also shown on the websites below. uk.advfn.com/p.php?pid=financials&symbol=LSE%3AGSK wsj.com/market-data/quotes/GSK/financials/annual/… For DCF purposes, would "profit after tax" of 4046 be the figure to use? Rather than profit attributable to shareholders (£3,623)? I'm inclined to use the latter as it's what shareholders are likely to get.
    – Jay
    Jan 2, 2020 at 22:51
  • @Jay usually EBITDA (earnings before interest, taxation, depreciation and amortization) is used in DCF.
    – ApplePie
    Jan 3, 2020 at 19:18

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