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Stupid DCF question
Hey guys, I’m self-studying technicals from a non-finance background and am a bit confused about the actual projection of cash flows for DCF valuation. I understand the steps to DCF that I have memorized for interviews—but still am stuck on how to actually accomplish some of them. For example, I...
DCF Question
Hi all, this might be a dumb question but would appreciate if you could help with the following: In a DCF we discount Unlevered FCFs with WACC to arrive at PV of UFCFs. We then sum the PV of UFCFs up, subtract debt and add cash to arrive at Equity Value which we then divide by shares outstanding to...
Problem with WACC in DCF
Hi, Lets say I have the following fcff schedule: 2023.30.06 -$35k 2023.31.12 -$35k 2024.30.06 -$25k 2024.31.12 -$15k If I’m making dcf analysis is it logical to just take total annual amount and discount by annual WACC? Or is it more correct to consider semi-annual re-investment? Finally, if the...
DCF Disparity between methodologies...Help
Hi All, I have a question about the disparity between the perpetuity DCF output vs. Exit Multiple outputs. I did a DCF and they are very different and wanted to know, is this normal? Or if they should be within a certain range of each other? For instance, the closing price on the stock was $77.83,...
DCF Question - Partial year CF
Say we have a company with a Dec FYE We are purchasing the company on 30 June 2022. We want to do a 10 years DCF Forecasted FCF at 31 Dec 2022 is $100M which will grow every year by $20M How do we adjust for a partial year valuation? Am I right to think we still set out the DCF using December Year...
Question about DCF
Hi Guys, I have a first round interview coming up with an EB but I'm having trouble conceptually understanding a DCF. I know you guys might give me shit for posting this, but if any of you have any ideas on where to start or youtube videos, etc. I would really appreciate it.
DCF Valuation
I'm looking at an acquisition of a portfolio of assets - some already operational and others in the development process. Acquisition will be on a cash-free debt-free basis, but will subsequently be financed at closing with a new senior facility. Couple of questions just to make sure I'm on the right...
Levered FCF - Mandatory Debt Payments
Hi All, I'm learning technicals for IB interviews coming up, and I was encountering a finance problem on levered free cash flows. Does mandatory debt payments in LFCF, include only principal payments? Or do they include both interest and principal payments? Thanks in advance.
How to value properties overseas - DCF (?)
Okay so I have a DCF valuation problem/buyout problem. I'm basically valuating a company and as you guys may know you value the company itself and then add the value of the properties and that what I'm going to offer my seller. I have or can valuate the property that is in my home country but I...
DCF with subsidiaries overseas
Guys I really need your help. I'm new at this firm and I don't get much help, I most things by Googling or asking people I know. However, I took the biggest fucking project at the firm and now I need to do a DCF with multiple subsidiaries that I can't get data for, but that isn't the problem since I...
Fiber (FTTH) DCF Modelling Help
Hi! I've been tasked with creating a DCF for a fiber rollout across 5 cities. Clearly the initial capex is high and is creating a lot of negative FCFs and consequently a negative EV? How long should my forecast be? Should I still be doing a terminal value or just a very long 20+ year utility like...
Forecasting a Balance Sheet without supporting schedules?
Hi Monkeys, I'm currently interviewing for a finance job and was provided a random company and asked to "build out a projected income statement, balance sheet, and DCF analysis for the company". I've always practiced forecasting balance sheets using supporting schedules like the debt schedule. Is...
Help with DCF model
Hi guys, I'm a second year student and I have a problem with my DCF model which was prepared for my paper work at university. The problem is the following: % of Implied EV from TV is 87%. As far as I know, this is an extremely high percentage. That is why, I would like to ask you for your help. I...
Terminal Value calculation in a DCF
Hello Monkeys, This is my first post and being used to read your high quality answers I am sure you will be able to bring me your lights When we calculate the terminal value in a DCF we use: (the last cash flow of our explicit horizon*g)/(WACC-g). Then we have to discount this Terminal Value, and my...
Intuition behind using P/E Multiple for TV
Hi All, For an upcoming modeling test I have a question that hasn't really been answered here I believe. I am required to build a DCF Model and got some pretty standard assumptions to work with. However, one of the assumptions tells me to calculate the terminal value using a given P/E multiple. What...
DCF Technical Question
Quick question. If the formula for LFCF = CFO - Capex - Debt Principal payment, why do you not account for principal repayment in a DCF? The typical guide says that you only go down to CFO in a DCF, but doesn't the LFCF also subtract out debt principal payment?
DCF Valuation Net Working Capital
Hi All, I am currently trying to complete a DCF, but am stuck on what I should select in terms of Capital Assets vs Capital Liabilities. Below is a screenshot of the balance sheet, I know typically Assets include: AR, Inventory, other receivables, and Other current assets. While Liabilities...
What Tax rate to use in a DCF?
If a company is currently not profitable and unlikely to be for the next 2-3 years, what tax rate do we use in the DCF when we tax EBIT? Is it reasonable to just use the long term tax rate?
Change in Deferred Taxes Statement of Cash Flows Impact
Im using the indirect method to calculate the cash flow statement. should i subtract increase in deferred tax asset and add back increase in deferred tax liability? What is a Deferred Tax Asset (DTA)? A Deferred Tax Asset is an asset on a company’s balance sheet that reduces taxable income for a...
DCF Question -- Should Acquisitions be Included In Capex?
Hey Guys, Quick question on the DCF . After I have NOPAT and I add back D&A and changes to NWC, I was wondering if I need to subtract out just mtx. capex or growth capex as well including acquisitions? The firm that is being valued is very acquisitive and so my thinking is that if I assume its top...
DCF Discounting Issue
Hi, Why does the time coefficient approach yield a different result vs the first method below? Can`t see the forest from the tree.. Method one: Step 1 NOPAT * (1+G)/ WACC -G Step 2 Step-two/1+WACC^5 EV 43.242 Method two: NOPAT / (WACC-G)*Time coefficient of the last period EV 43.705 (All input...
DCF question- getting different answers for the same situation
Hi, This is a conceptual question. I am confused with a DCF situation. The attached Excel file shows my calculations. I am trying to do a very simple three-period DCF by two methods: 1. deducting interest expense from cash flow 2. accruing interest expense to debt. However, for some reason the two...
how to forecast PP&E and intangible assets for DCF valuationn??
thanks!!!!!!
does Accumulated other comprehensive earnings go on the Cash Flow Statement?
There is a line on Balance Sheet: Accumulated other comprehensive earnings. Does that go to the cash flow statement?
DCF Valuation for a private company
I have a couple of questions pertaining to calculating Cost of Debt while doing a DCF for a private company based on the projections provided by its internal finance team. The company has a bunch of preferred financing. Series A preferred – 28mm (7.85% PIK rate) Series B preferred – 19mm (7.3%...
How to build DCF for financial company?
I'm trying to build a DCF for a financial company, but am a bit confused about how to come up with FCF and WACC because a large portion of the company's income is from interest (i.e. the company borrows a substantial amount of money (e.g. through customer deposits) and lends this out at a higher...
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