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Decent overview of the workings of a DCF Model click here
Boxes that are highlighted in black are where users can plug in their own assumpti
Discounted cash flow (DCF) As the name implies, a companies future cash flows are discounted back to the present to derive
The DCF Model is certainly not a perfect valuation tool (as it is very difficult to predict what a company will grow its cash flo
value that, when combined with all the other components of a users research on a company, can help give an idea of what a co
mind that the Intrinsic Value that is produced is only as good as the numbers put into the model. If you assume unrealistic gro
unrealistic intrinsic value result. The investor should think of the Intrinsic Value figure given in this light: you need to pay th
given return (i.e. the discount rate) on your investment if your assumptions are correct.
Limitations of my excel DCF Models: You can only use 5 year time periods unless you modify the spreadsheet. I will continue
Terminal Value: The PV of the all the companies future cash flows.
Terminal Value Growth Rate: The rate that you expect the company to indefinitely grow its cash flows by.
Discount Rate: The investors required rate of return. NOTE: (If your growth rate is higher than your discount rate, the mo
Note: This is a beta copy and as such may have some bugs. If any are found please email focusinvestor@yahoo.com so they
ounted back to the present to derive what a valuation for the company in question.
hat a company will grow its cash flows at), but it can provide one estimate of
y, can help give an idea of what a company is worth. The user should also keep in
model. If you assume unrealistic growth rates (or terminal value) you will get an
ven in this light: you need to pay the price given, or lower, in order to achieve a
er than your discount rate, the model will not function properly)
$15,000
Growth Rate:
10%
Discount Rate:
15%
Shares Outstanding:
10,000
$330,000
Intrinsic Value:
$33.00
$245,000,000
Years:
Growth Rate:
1-5
10%
1%
Shares Outstanding:
Debt Level:
29,400,000
$978,000,000
Year
1
2
3
4
5
6
7
8
9
10
Flows
269,500,000
296,450,000
326,095,000
358,704,500
394,574,950
414,303,698
435,018,882
456,769,826
479,608,318
503,588,734
Terminal Year
$508,624,621
6-10
5%
Growth
10%
10%
10%
10%
10%
5%
5%
5%
5%
5%
Discount Rate:
15%
Margin of Safety:
30%
Value
$234,347,826
$224,158,790
$214,412,756
$205,090,462
$196,173,485
$179,114,922
$163,539,711
$149,318,867
$136,334,617
$124,479,433
$1,826,970,869
$898,030,196
$2,725,001,065
29,400,000
$59.42
$41.60
33%
$44,185,000
Years:
Growth Rate:
1-5
10%
1%
Shares Outstanding:
Debt Level:
6-10
12%
29,200,000
$225,000,000
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Flows
48,603,500
53,463,850
58,810,235
64,691,259
71,160,384
79,699,630
89,263,586
99,975,216
111,972,242
125,408,912
144,220,248
165,853,286
190,731,278
219,340,970
252,242,116
Terminal Year
$254,764,537
Growth
10%
10%
10%
10%
10%
12%
12%
12%
12%
12%
15%
15%
15%
15%
15%
11-15
15%
Discount Rate:
12%
Margin of Safety:
30%
Value
$43,395,982
$42,621,054
$41,859,964
$41,112,464
$40,378,313
$40,378,313
$40,378,313
$40,378,313
$40,378,313
$40,378,313
$41,459,875
$42,570,407
$43,710,686
$44,881,508
$46,083,691
$629,965,511
Terminal Value:
$423,132,076
$1,053,097,587
29,200,000
Intrinsic Value:
$28.36
$19.85
40%