Financial Modeling Quick Lessons: Building a Discounted Cash Flow (DCF) Model (Part 1) [UPDATED]

Learn the building blocks of a simple one-page discounted cash flow (DCF) model consistent with the best practices you would find in investment banking. If you are preparing for investment banking interviews, know that the DCF is the source of a TON of investment banking interview questions.
To download the backup Excel file, go to www.wallstreetprep.com/blog/financial-modeling-quick-lesson-building-a-discounted-cash-flow-dcf-model-part-1/
The DCF modeled here is a simplified version of a fully-integrated DCF model. For a deeper dive into DCF modeling in Excel, please visit www.wallstreetprep.com.

[@ATothFTW18]

Could you make a video on how you do the forecasts?

[@MichaelNamib]

Why are Capital expenditures not subtracted in total, but only the changes? I would understand if that was a balance sheet item, but not an expenditure.

[@manbearpig4702]

Capex are a balance sheet item. The cash spent on capex is added to the balance sheet. For example, if the company buys a building, they dont just expense it; it is added to the PPE on the balance sheet as an asset.

[@taif3157]

my question is how to forecast the future ?

[@rounitsoni4025]

I am facing an issue while doing the DCF analysis in my financial model and i am not able to reconcile it correctly. Can someone please help me with my issue, I would be really grateful for it.

[@benyaminmiller5504]

Why are we not using change in nwc?

[@ddn9617]

change in nwc are yourr receivables, inventories, prepaid, expenses, payables etc

[@lifeofchinonso]

Thank you

[@user-hb6tw4gu8w]

Can I get excel file pls

[@DtscjjDtedh]

Perez Jeffrey Smith Deborah Lee Richard

[@benyaminmiller5504]

ISNT TERMINAL VALUE = (FCFN*(1+g)/WACC-G) ? You did not do this formual

[@yufanzhao3867]

this is the gordon growth method

[@benyaminmiller5504]

@@yufanzhao3867is this not the PGR method?