Excel skills for DCF modelling
Hi, I have a decent amount of experience using excel, but need help with something.
I recently landed an internship at a well-known firm that does commercial real estate investing. They want to teach me to do dcf modelling when I return to NY from break but I want to ensure I'm fimiliar with the tools I'll need to do so.
In short, my question is what specific formulas and other excel tools should I be fluent in to learn dcf modelling in a few weeks?
Thanks, appreciate it.
DCF is the easiest thing you'll do in finance. There are really no special formulas.
The only difference is the DCF model on the macabacus.com site, which uses the NPV formula and does a sort of sensitivity table with different WACCs. It's the default template (or style) that many banks use for the DCF analysis, which is harder to spot check as the whole calc is in that formula, but it's more dynamic.
Learn the XIRR formula and know what Excel's NPV formula does (i.e. if memory serves it does not include a year zero).
That's really the main thing formula-wise.
Know how to do sensitivity tables, since they'll probably want to see those too.
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