DCF Quick Lesson: Video Tutorial (2-Part Series)
Learn the building blocks of a simple one-page DCF model consistent with the best practices you would find in investment banking. As a side benefit, the DCF is the source of a TON of investment banking interview questions.
Before We Begin, Download the DCF Template
Use the form below to get the Excel model template to follow along with this lesson. (If you’ve already downloaded the Excel template file from Part 1, you’re all good — this lesson uses the same file).
DCF Model, Part 2
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Assume today is 1Jan2013, Can I use 31Dec2013 as the year0 and find sum of present value at 31Dec2013, then compare market price of 1Jan2013 with sum of present value at 31Dec2013 to make decision to buy if sum of present value at 31Dec2013 is over market price of 1Jan2013?
You may want to rename row 35 on the DCF exercise tab as it currently shows CapEx rather than PP&E. For anyone not watching your video, they will get to a different conclusion if used as CapEx.
What is the difference between the enterprise value in the DCF model versus the enterprise value that is used in LBO models (market cap + net debt)?
Thank you for the great lesson!