What's hard about creating a DCF Model on excel?
The concepts are pretty basic, and obviously its an art and not a science. But when it comes to creating a DCF model on excel, where does it get complicated? From what I've seen, its very simple. You just insert formulas and link the different cells together. So how can companies like Wall Street Prep justify charging so much money to teach you how to create a DCF model? Is there something that I'm missing? Is it difficult because you have to learn how to do it without a mouse?
Give me your email and I will send you a DCF model. It isn't the discounting part, it is the projections, growth rates, everything involved. Besides, DCF is pretty basic. You start doing LBO's, Stock vs debt purchases, etc and things can get pretty complicated. I'll send you a model I did for a class and then you can post on here if you think it is still easy to build.
I agree with AnthonyD. I think the best thing you can do is pick a public company, use their financial statements and build a very basic model. Once you have that add a patch to simulate a scenario, such as an acquisition, or something similar.
I'm assuming you're in college. One of the harder things to replicate is the juggling of several other assignments while working on a model. I don't think I've ever had the chance to just sit down and build a model from start to finish in once shot; instead, someone will ask you to do something else such as comps, or research, or create a presentation. I feel part of the challenge is stepping away in the middle of the process to come back later and get right back into what you were doing.
Yes, after doing a few valuations it does become easier - you gain an understand of where errors are in the model. I'd also be willing to help, I could give you some parameters to create a hypothetical scenario. PM me if you are interested.
Also, I think the difficult part is how you justify the drivers behind your model - why you use x% as the growth rate, etc. Like the OP said, it's more art than science, and the art part is difficult.
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