Valuation 1: DCF
This hands-on course is focused on the practical implementation of a Discounted Cash Flow (“DCF”) valuation analysis. The skills required to build a DCF analysis will be discussed and incorporated into a financial model. Participants will learn to recognize and avoid the most common errors that finance professionals make when creating a DCF analysis. This course will also include a number of Excel tips and skills to help a user check and audit a financial model.
This course builds on "Building a Financial Model (of a Company)", so participants may want to complete that course prior to taking the "Valuation 1: DCF" session.
Review Valuation Concepts
- Discuss various valuation methodologies and the appropriateness of using a discounted cash flow methodology to value a business
- Use two common styles to create a DCF analysis
- Discuss various methodologies to value the terminal period
Incorporate a DCF Analysis
- Properly calculate a company’s levered or unlevered free cash flows
- Build a terminal year in the model to create a steady-state perpetual cash flow
- Review critical terminal year assumptions including Capex, depreciation, working capital, margins and income taxes
- Calculate the tax impact of unlevering a company’s cash flows
- Calculate the company’s cost of capital and choose an appropriate weighted average cost of capital (“WACC”) range
- Discount the cash flows in the forecast period and ensure that the cash flows are discounted to the correct period
- Discuss common discounting errors and review the magnitude of discounting the cash flows to the wrong time period
Understand the DCF Analysis
- Use a number of powerful Excel tools to sensitize the outputs
- Incorporate appropriate ratios and performance metrics
- Create “flags” to warn the user if a covenant has been tripped
- Conditionally format output tables to highlight specific results
Upcoming Valuation 1: DCF EventsAll Events
It looks like there aren't any scheduled events coming up. Get in touch or sign up for our newsletter to be informed about new events.
Sign up for The BenchMarq to stay informed of Marquee news & events.