I would like suggestions on what is the one book on DCF you must have!

A little background, I have worked in and around finance for a couple of years and so I know my way around balance sheets but when I need to move away from the standard FCF formula (Eg do intangible purchases count at capex?) I am clueless.

Is there a book that will walk me through every aspect of the balance sheet and its impactr on FCF as well as provide working examples so I can try my hand at DCF's with the hope of coming a model guru in two months.

Thanks for your help all!

3 Comments
 

If you know anyone that has done CFA Level 2, ask to borrow their book and have a look at the Equity book(Volume 4) and flick to the valuation section - i think it was study session 12 towards the back (its a 600+ page tome!!). That will walk you through the various ways to get FCF using WC/Capex/Interest/Tax from NI/EBIT/EBITDA as well as different ways to calculate discount rates, growth assumptions and other valuation techniques. It has 'real life' case studies too

 

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