I've been reading a little bit about DCFs and want to practice modeling out a DCF on my own. Does anyone know what the best way to get started on doing something like this is? I'm guessing that trying to model a very large company would be challenging, so would it be best to start with a small cap? Also, any tips about doing this in general?
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Pick a company with clear financials and avoid specialized industries (FIs, resources, etc) for which you won't know the drivers/accounting. If you've never done it before it will be more a practice of accounting and how the statements flow as DCF itself is straight forward.
check inbox
I didn't see a PM...
i'm interested too since I have interviews pretty soon.
thx
Me three please !
if not you can only try macabacus.com
I did a practice recently and sent it to a formr banker who said it was pretty good.
For a standalone DCF,
Import historical I/S into excel.
Project out based on relevant drivers (read analyst estimates for revenues, etc). Project down to ebit.
Project relevant Working Capital Items, (noncash current assets, non debt current liabilities)........you have to use the relevant drivers, (i.e, for A/R, days receivable, etc).
Project Capex (read 10K, or for simplicity, % sales Project D&A (some will say as a % of sales, but you should build out a PP&E sched and depreciate per asset excluding land and incorporate capex)
EBIT(1-T)+D&A-increase in WC-capex=unlevered FCF.
the rest straightforward, calculate wacc, discount unlevered FCF, calc terminal value, sum them to get to enterprise value, net debt, equtiy value../shares outstanding=pps
for a full three statement it's a little different btw..this is just simple
let me know if u'd like a sample, i'll send it to u, pm email address
^PM sent
Do you still have the sample DCF you could send me? Thanks
It's been a while this post is active, but if anyone could send me a sample DCF as well, that would be great.
Macabus.
DCF and PV practice questions (Originally Posted: 09/15/2009)
Hi there,
Could anyone point me to university court sites that have powerpoints/lecture notes/practice problems for DCF and PV? I'm trying to get some extra practice in and I usually used MIT's opencouseware but they don't have any corporate finance classes available.
Preferably elite schools.
Proffesor Damodoran at NYU.
You da best.
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