Discounted Cash Flow | DCF Model Step by Step Guide

Рет қаралды 870,645

Күн бұрын

Discounted Cash Flow step by step guide using free DCF excel model.
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RESOURCES:
💻 DCF Template for this video: view.flodesk.com/pages/61fba6...
📹 Valuation Methods Video: • How to Value a Company...
In this video, we go over how to create a discounted cash flow with the end goal of reaching a company's intrinsic value. Through this, we can determine if a company's share price is over or undervalued. From free cash flows, to the WACC, to Terminal value, all the technical concepts are explained and applied using the Excel model.
Key steps in this DCF model:
- Forecast the FCF, typically for a 5-10y period
- Calculate the Weighted Average Cost of Capital (WACC)
- Calculate the Terminal Value
- Discount the cash flows to present
- Reach a valuation and calculate an implied share price
LEARN:
📈 The Complete Finance & Valuation Course: www.careerprinciples.com/cour...
👉 Excel for Business & Finance Course: www.careerprinciples.com/cour...
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Chapters:
0:00 - Intro
1:08 - DCF Steps
2:40 - Free Cash Flow
6:23 - WACC
9:35 - Terminal Value
12:11 - Discounting Cash Flows
13:45 - Equity Value
15:05 - Full DCF Model
19:22 - Assumptions
Disclaimer: I may receive a small commission on some of the links provided at no extra cost to you.

Пікірлер: 450

@KenjiExplains 2 жыл бұрын

👉 Get 25% OFF Financial Edge Using Code KENJI25: bit.ly/3Ds47vS

@dushyantguntukwar6342 10 ай бұрын

what if the growth is not stable how to calculate make a video?

@jameszhang4798 8 ай бұрын

Kenji, for the tax rate, do I go in the SEC fillings to find that number？

@mxdrives Жыл бұрын

I am a recent graduate in Finance and I have to say that the way you explain things are far better than 99% of the professors I had. I am so thankful for your content. Please keep up wonderful work, Kenji!

@gaelimadeddine3139 Жыл бұрын

I agree he explains very well, but maybe watching a summary after getting a course helps. I am not sure that someone completly stranger to finance would understand. This a a good way to revise after getting a full course. So don't be too harsh on your former teachers. ;-)

@CarlosTorres-px6op Жыл бұрын

Probably you've got an interview in two days, so you're paying attention now, while didn't give a fuck when your teacher tried his best to tell you what terminal value was.

@abc33944 10 ай бұрын

professors like to make things sound complex ,suits there ego

@HaceSunnyDSol 2 жыл бұрын

bros carrying us all to an investment banking offer.

@nobody6118 Жыл бұрын

Get into leverage financing part..much more fun and rewarding

@Ismail28462 9 ай бұрын

@@nobody6118why do you recommend that?

@jamesdillan1928 5 ай бұрын

@@nobody6118trzstz

@ruiqingqiu9010 2 жыл бұрын

Got an assignment of DCF without having any classes before. Tried a few crash course videos, only yours taught me the real thing in a short time. Thank you so much!

@KenjiExplains 2 жыл бұрын

Thanks for the nice comment means a lot 🙏

@australianpatriot 2 жыл бұрын

@@KenjiExplains how did u find the beta, cost of debt, etc?

@culifabrizio1479 Жыл бұрын

@@australianpatriot bettas are in the internet, then you leveraged to your company

@nicklaslouie5693 2 жыл бұрын

You’re offering a lot of value through your channel. Good work.

@KenjiExplains 2 жыл бұрын

Thank you 🙏

@Asw_2004 Ай бұрын

@@KenjiExplains At 5:14 why isnt the EBIT multiplied by (1-Tc) which is -75% or 0.075

@abboudjr 10 ай бұрын

You know why your video works?Because you're not cocky and trying to show off your knowledge, but instead you're actually sharing knowledge.I love it...Keep up the good work.

@DonAlacran4 2 жыл бұрын

Great video Kenji! You essentially condensed what I got out of an entire semester long course in corporate finance down to 20 minutes... super impressive! Your tone and pacing really kept me engaged, and the breaks in between excel calculations and concept breakdowns were so well done. Really looking forward to your next video man, keep it up!

@KenjiExplains 2 жыл бұрын

Thank you for the awesome comment means a lot! 🙏

@orlandogomes7466 2 жыл бұрын

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@xX3laal9amtXx 2 жыл бұрын

Wow, I studied finance non of my professors had explained it as clear as you did. You are brilliant in delivering knowledge and ever thing ❤️

@KenjiExplains 2 жыл бұрын

Haha thanks for the nice message means a lot! Glad it was helpful :)

@KenjiExplains Жыл бұрын

📊 Learn a full DCF here: kzfaq.info/get/bejne/bZ2ontie1c_TZGw.html

@jamesstramer5186 2 жыл бұрын

Thanks man. I really love the fact that you give a brief overview at the start of every video which really helps connect each concept to the whole.

@KenjiExplains 2 жыл бұрын

Thank you!

@shmulyseligson Жыл бұрын

I have recently started in the finance industry and even though I didn't understand all the technicalities, I was able to follow along and learn the formulas and process of a DCF analysis. Thank you!

@gaborscharioth8270 5 ай бұрын

When you did the Discounting Cash Flows Calculation the WACC was 7.5%, not 8% probably not visible because you decreased the decimal. Took me a second to find out what was wrong with my calculation. Thank you for the video, helped me a lot.

@vikramadityarathore97 2 жыл бұрын

Hey man kenji excellent work , you simplify things in finance so well.I would be extremely grateful if you make video based on how do we create assumptions for financial models.

@jeremiahkorakali4587 2 жыл бұрын

Great video Kenji. I thought you should have mentioned why the terminal value was also in the same year as the last forecasted cashflow year. For those who wondered why, it is because the terminal value is calculating the present value of all future cash flow based on the assumption that the last projected cashflow year is the present time. This is adjusted by discounting further back to actual present time along with the other forecasted cashflows.

@KenjiExplains 2 жыл бұрын

Thanks for the input!

@rolandjambaya8332 2 жыл бұрын

@Kenji Explains Wow! Lets just say, not all Teachers need to go to a Teacher training course or college! I have just watched your videos on Valuation in preparation for my assignment, thank you very much! You made a very complicated subject, appear so easy! Thank you, very clear good pace, no unnecessary jargon. Thank you!

@aakashagarwal9827 2 жыл бұрын

Best DCF explanation I've seen so far!!! keep making more model explanation videos. Thank you so much

@KenjiExplains 2 жыл бұрын

Thank you! More in the pipeline!

@huhh6264 Жыл бұрын

I don't think I would every find a better video than this one on whole youtube .....thank you so much ✅✅✅

@Maannggoo Жыл бұрын

Wonderful explanation! I’ve never actually felt that i got the DCF model before this video. Now everything is well organized in my minde. Thank you for such an amazing effort.

@mayurbhatia2250 Жыл бұрын

I would take a moment to appreciate you to put and explain these contents. Please keep it up doing, you are very good at this.

@aidanmilla5699 Жыл бұрын

Great explanation, thank you

@programmingjo 8 ай бұрын

I've never dealt with Intrinsic Valuing methods in my life. This was very infomative and useful. Thanks.

@TN-wi6ge 2 жыл бұрын

Thanks Kenji for a great video! You made it really easy to understand! It would be wonderful if you make a separate video about how assumptions and sensitivity analysis!

@KenjiExplains 2 жыл бұрын

Thank you and will keep that in mind!

@Milton-ij9eg 12 күн бұрын

GREAT CONTENT! Thank you Kenji.

@pratima1rajguru 22 күн бұрын

Thanks Kenji, what a brilliant non cocky way of explaining tough concepts

@KenjiExplains 21 күн бұрын

thank you!!

@dhruvpatel7637 2 жыл бұрын

Learning about this in college right now, nice video to help me recap/summarize what I learned. Great help!

@sdave6259 2 жыл бұрын

Best crash course ever...so much easier to understand than my finance course! Really, Thank you!

@KenjiExplains 2 жыл бұрын

Great to hear thanks for watching it means a lot! :)

@toniweigl9783 2 жыл бұрын

After the third video of yours today, this is so amazing, I have to do a valuation of a company for university and I have the feeling, your videos are so much more valuable than anything I‘ve learned so far. Thanks a lot, really appriciate your work!

@toniweigl9783 Жыл бұрын

@@Pens4Life85 I am studying at University Cologne in Germany. What exactly do you need?

@toniweigl9783 Жыл бұрын

@@Pens4Life85 let me know how to get in contact

@frankvdnieuwenhuizen4602 Жыл бұрын

Thank you very much for this very clear explanation and highly instructional video. I'm a enthusiastic beginning investor with basically no knowledge of these kind of processes. Your videos make stuff a lot more easy and therefor much more fun. Keep up the good work.

@ankitbulsara6875 2 жыл бұрын

This is the best explanation of DCF model on youtube.Thank you Sir...

@user-gv1fj3ok4h 4 ай бұрын

Awesome video. It's been beaten to a pulp by now, but you really do explain this better than most finance professors. Haven't had to do one of these in a long time with current role, and brushing up. You'd be a killer teacher.

@linelogic1699 2 жыл бұрын

You are one of the very few who explained why D&A is added to the FCF calculation . Great Video for non finance background people like me.

@KenjiExplains 2 жыл бұрын

Thank you! Appreciate the nice comment :)

@nikhilpachauri5761 2 жыл бұрын

Thanks for explaining it with such ease.. It would have been great if I had you as teacher 10 years back when I was doing my MBA

@chshree007 2 жыл бұрын

Learned more than my lectures here! Awesome Kenji!

@jenniferpreston3080 Жыл бұрын

I have watched a couple DCF video's, this video is one of the better explanation. He is fast, so I had to watch it a couple time. The excel file was very helpful.

@kugankumar202 2 жыл бұрын

Thank you so much for this Kenji, this was a great resource to learn from and I am very grateful to you!

@feastflavorswithdipti4067 2 жыл бұрын

hello kenji, i am CFA and seen your vidios for brush up ..its worth. keep it up.

@svenkats71 2 жыл бұрын

Thank you Kenji -- the templates are easy and simple -- you explained it very well and Of course, I had a great learning

@camlex6310 2 жыл бұрын

Really clear explanation! Another great video, thanks Kenji

@edinya6934 2 жыл бұрын

I love what you providing to us thank so much! Continue to do so God bless you.

@jackieyip 2 жыл бұрын

Wow, you have explained far better than my professor on these finance calculations.

@OA-hm9xn Жыл бұрын

This is possibly the best explainer I've seen

@zachgoll 2 жыл бұрын

Have been looking for a video like this for a while! Really nicely done, very helpful.

@KenjiExplains 2 жыл бұрын

Thank you!

@Oscar-yo3jy 2 жыл бұрын

Hi Kenji, Great content as always! Could you possibly do another video on DCF valuation using forecasted free cash flows? How would you go about predicting the future cash flows of a given company? I understand that it may be a lengthy process, but for those trying to break into investment banking or investment management I think it would be really informative. Thanks!

@KrishnaShah-hp7su 2 жыл бұрын

yes this is much needed . Please Kenji if you noticed this cmnt consider making a full video on DCF

@kennethchong4385 2 жыл бұрын

Well curated, depth, pace and knowledge impeccable.

@stevendoan6072 2 жыл бұрын

Thank you, Kenji! What a good explaination!

@janice9001 2 жыл бұрын

Thank you so much for this informative tutorial, you've just saved my life for my finance project!

@KenjiExplains 2 жыл бұрын

Glad I could help!

@jayhoe8174 2 жыл бұрын

dude, this is literally the best video on this topic out there. You just made me pass my interview!

@KenjiExplains 2 жыл бұрын

haha that's awesome man congrats!

@puminprapusakpitak3996 2 жыл бұрын

Appreciated! Very useful one. Thanks Kenji.

@excelmaster8651 Жыл бұрын

Thank you for taking the time to prepare this video. it helped me to grasp a good knowledge in the area I was struggling.

@kabilanv6453 9 ай бұрын

It's a great video, with a clear-cut explanation. Thank you very much :)

@MrSilenxe Жыл бұрын

That video was just amazing. Thank you, now i can say that im pretty familiar with the DCF model in an interview

@janoshajdu4552 2 жыл бұрын

Hi Kenji, would highly appreciate if you could do a video about how to make the in-depth EBIT calculation for the projected years, based on historical data and CAGR. (as shown at 19 minute)

@dineshlutchmun8534 7 ай бұрын

Exactly i need that too

@method341 3 ай бұрын

Dude, that shirt is SICK! Never seen that color combination in a Polo before.

@cuelbkk 2 жыл бұрын

Excellent video. Simple and to the point

@alexandredelcommune5316 Жыл бұрын

videos amazing, your Excel tutorial videos helped me pass an Excel hiring test

@fazalrehman6375 2 жыл бұрын

Great! I got lots of things clear through your video.

@srikanthkanagal1 Жыл бұрын

one of the best concise videos i saw. Thanks a lot

@amyazaire1114 2 жыл бұрын

Thank you Kenji! Keep up the great work!

@KenjiExplains 2 жыл бұрын

Thanks for always supporting! :)

@Skylarbill4332 2 жыл бұрын

Love this video! Thank you so much for the explanation. For further suggestions, is it possible to have a explanation of the 3-statements financial modeling concept? Thanks a lot!

@KenjiExplains 2 жыл бұрын

Noted thank you!

@almadeunrebel Жыл бұрын

thank you for making your model open source

@vaibhavkeshari9620 2 жыл бұрын

You are so helpful, thank you so much!

@z.kuwait5277 8 ай бұрын

Excellent guide. Thank you!

@kazihasib3508 2 жыл бұрын

Highly appreciate your video! Thank you😊😊

@davidcayuela5536 2 жыл бұрын

Amazing video Kenji! Thanks a lot!!! It would be amazing if you do a second part of this video analyzing a real and famous company to watch how do you find all the numbers and how it works in the excel. Thanks and greetings from Spain! Great content! 👏🙌

@KenjiExplains 2 жыл бұрын

Thanks for the idea, will look into it! Un saludo David

@anthonymunoz9148 2 жыл бұрын

Yes please!

@AchtertuinAvonture 6 ай бұрын

Practical and well explained dear sir thank you

@TheKki2 Жыл бұрын

Your content is brilliant

@andrasbajusz9290 2 ай бұрын

Thank you! Helped me a lot!

@fitfirst4468 2 жыл бұрын

Thank you so much Kenji

@francescoguidi8830 2 жыл бұрын

can you do more of these videos ? they are really helpful

@willzinner8813 2 жыл бұрын

class video man, so easy to understand love it

@dylanquepasa 2 жыл бұрын

Great video Kenji, thanks so much for sharing. Any chance you could make a video on the full process of how you came to certain assumptions and relating it to a real company? It is a lengthy process but would be very helpful, thank you 😊

@KenjiExplains 2 жыл бұрын

Hey thank you! yeah as mention it’s lengthy to do so maybe for January/February as i get the xmas break to work on it. Thank you for the suggestion!

@monkeymaster6489 2 жыл бұрын

Excellent excellent excellent video man. Best explanation of DCF I've seen. You have a talent for this man.

@KenjiExplains 2 жыл бұрын

Haha thank you man, glad you found it useful!

@jacobnorman5420 2 жыл бұрын

Keni, thank you for this videos and all your videos I have not yet seen but I am going to see.

@vaishnavikp6788 2 жыл бұрын

Such a great way of explanation....... Thanks alot for this!

@williama.rivera9414 Жыл бұрын

Good and precise explanation. Thank you for teaching

@raquelsousa2618 2 жыл бұрын

Thank you very much. This video helped me a lot!

@omaralami1278 2 жыл бұрын

tbh, you explain better than my professors. Thanks and keep going!

@KenjiExplains 2 жыл бұрын

lol thank you!

@ionutciprianfarcas6420 Жыл бұрын

Thank you a lot for the DCF template!

@poojasah5672 Жыл бұрын

all concepts cleared. thank you soo much sir

@DCphoenix 9 ай бұрын

Hi Kenji. Fantastic DCF model explanation! Been looking how to calculate and understand DCF model for a long time! This was the best video for it! One question: Around 11:15min. The numbers within the Period section (EBITDA & FCF), are they also assumption, or number calcuated from the assumption above? I'm just unsure if I was to do a real analysis, how should I project future EBITDA & FCF within the "terminal value" section? Thank you!

@juanbautistamarini3787 2 жыл бұрын

Thanks, Kenji!!

@AbdulQadir-gf5nv 2 жыл бұрын

Thank you so much for such an excellent explanation 👍🏼

@KenjiExplains 2 жыл бұрын

Thanks for watching!

@andrewsalmon100 Жыл бұрын

Thanks very much. Beautifully presented.

@erendirmilli3323 2 жыл бұрын

Very nice work Kenji!

@AngelFdz03 2 жыл бұрын

thanks for wearing ralph lauren helping out my stock!

@macoynaguit1968 2 жыл бұрын

Thank you Kenji!

@hamzaraptor 2 жыл бұрын

Thank you for this detailed video

@josephelahi8853 2 жыл бұрын

Loved the video, in the future can you expand on this by doing a DCF for an actual public company, it would help a ton!

@KenjiExplains 2 жыл бұрын

Noted thank you for the suggestion!

@delaneybausch5372 10 ай бұрын

Very helpful video! Great job.

@ianapindi8837 11 ай бұрын

This was really helpful!

@WOLF-wd8mp 7 ай бұрын

Many thanks Kenji!!!!! You are greatttttt!!!!1

@Chrisparkinj Жыл бұрын

very helpful, you are brilliant, thank you very much and good luck on your journey

@sheikhraihan8550 Жыл бұрын

Great stuff man. Thank you!!

@jimmysindia Жыл бұрын

thanks kenji... simple and on topic...

@kalox314 Жыл бұрын

great great great tutorial! thanks!

@chwftw23 2 жыл бұрын

SUBSCRIBED!!!! Great detailed explanations. Thank you

@KenjiExplains 2 жыл бұрын

Awesome, thank you!

@corradoforza 5 ай бұрын

Thank you for the video! I really appreciated it. Video suggestion: make a three statement model and link it directly to a DCF evaluation model from scratch

@michaelquach7046 2 жыл бұрын

Well done. Great breakdown for something that can get so complex.

@georgemoros3839 Жыл бұрын

Really helpful video. Thank you so much !

@nandoborchardt4327 9 ай бұрын

I have a job interview for an M&A position soon. I did not know much about the topics you discussed. I have searched long to find a good ressource on these subjects and your video is perfect. If I could like it more than once I would haha. Thank you so much. You earned a new subscirber!

@KenjiExplains 9 ай бұрын

Thank you for the message! Best of luck with the interview 👍