Discounted Cash Flow (DCF) Valuation

Value as present cash · risk and time · one-off items · steady state · revenue drivers · industry context

1. Why value equals future cash, discounted
2. Discounting a cash-flow series in a spreadsheet
3. Case: pricing a small shop from its expected cash
4. One-off items and the steady-state idea
5. Normalizing reported results in a template
6. Case: cleaning a retailer’s history and fixing the horizon
7. Revenue drivers: volume, price and customers
8. Building a driver-based revenue forecast in a template
9. Case: forecasting a subscription business from its customers

Capex and depreciation · working capital · FCFF and FCFE · three-statement links · balance checks

1. How growth drives capex, depreciation and working capital
2. Building capex, depreciation and working-capital schedules
3. Case: a growing distributor and its cash tied up in stock
4. FCFF and FCFE: what each measures and when to use it
5. From revenue to free cash flow in a spreadsheet
6. Case: one company, both cash flows side by side
7. How the three statements link in a projection
8. Linking the three statements in a spreadsheet model
9. Case: finding why a projected balance sheet does not balance

Cost of equity (CAPM) · risk-free rate and risk premium · peer betas · cost of debt · WACC · matching rates to cash flows

1. Cost of equity and the CAPM idea
2. Choosing and documenting WACC inputs in a template
3. Case: working out WACC for a listed manufacturer
4. Why beta depends on debt: unlevered and levered
5. Unlevering peer betas and relevering in a template
6. Case: choosing a peer group for a regional retailer
7. Why cash flow and discount rate must match
8. A matching checklist for the model
9. Case: a valuation that mixed currencies and inflation bases

Mid-year discounting · stub periods · perpetual growth · exit multiples · implied cross-checks · sustainable growth

1. Mid-year discounting and the stub period explained
2. Setting up discount factors for mid-year and stub periods
3. Case: valuing a company on a date in the middle of its year
4. Terminal value: perpetual growth and exit multiples
5. Computing both terminal values in a template
6. Case: cross-checking with implied multiple and implied growth
7. How big terminal value should be and how fast it can grow
8. A terminal value test sheet
9. Case: a terminal value that carried most of the valuation

Net debt · minorities and preferred shares · option dilution · surplus cash and pensions · leases and cyclical earnings

1. The bridge from enterprise value to equity value
2. Building the bridge and the per-share value in a template
3. Case: from enterprise value to a price per share
4. Operating versus non-operating assets and liabilities
5. Valuing surplus cash, investments and pension deficits
6. Case: a company with large cash and a pension gap
7. Why leases, stock-based pay and cyclical earnings need a rule
8. Recording each treatment choice in the model notes
9. Case: the same company with leases treated two ways

Model layout · version log · debt tranches · tax shields · repayment schedules · circular references

1. Why a model keeps inputs, calculations and outputs apart
2. Laying out a model template with formatting and a version log
3. Case: untangling a model with inputs buried in formulas
4. Debt tranches, interest tax shields and cash to equity
5. Building a debt schedule with repayments and interest
6. Case: a company that refinances part of its debt
7. Circular references: why interest on average debt loops
8. Iteration switch and fixed-balance approach in a template
9. Case: a model that returned errors after a circular reference

Sensitivity tables · scenarios · formula tracing · balance checks · independent recalculation · common mistakes

1. Why one answer is never enough: sensitivities and scenarios
2. Building data tables for discount rate, growth and margin
3. Case: reading a sensitivity table for a mid-sized manufacturer
4. What can go wrong inside a model: the audit mindset
5. Tracing formulas and running balance and consistency checks
6. Case: finding a hidden error in a model
7. The most common DCF mistakes and why they happen
8. A review checklist for catching mistakes
9. Case: correcting a flawed DCF model

Market prices · peer multiples · explaining gaps · a listed company case · value range · risk commentary

1. Why a DCF value and a market price differ
2. Comparing DCF output with peer multiples in a template
3. Case: a DCF value below the market price
4. How to compare a listed company’s DCF with its market
5. Gathering public data and listing the assumptions
6. Case: which assumptions explain the difference
7. Telling the story of a valuation
8. Building a valuation summary page with a value range
9. Case: naming the assumptions that would change the conclusion

Honest assumptions · choosing a method · relative and startup valuation · full model build · comparison with market value

1. Why honest assumptions matter more than a neat answer
2. An assumptions log with sources and reasons
3. Case: a valuation nudged to hit a target price
4. DCF, relative and startup valuation compared
5. A method-selection guide by stage, data and purpose
6. Case: valuing a mature company and an early startup
7. Planning the full model from published statements
8. Building the DCF in the spreadsheet template
9. Case: comparing the finished model with market value