DCF – Advanced DCF
Articles
How to Build a Multi-Year Unlevered Free Cash Flow Forecast for a DCF
Learn how to forecast Unlevered Free Cash Flow across a multi-year DCF: building revenue, EBITDA, EBIT, CapEx, and working capital into a cash flow stream ready to discount.
How to Build a Full DCF Valuation Model From Scratch: A Step-by-Step Interview Walkthrough
A step-by-step walkthrough of building a complete DCF model in an interview: revenue forecast, WACC, terminal value, and the bridge to equity value per share.
What Is DCF Sensitivity Analysis? Why WACC and Terminal Growth Drive Your Valuation
DCF sensitivity analysis tests how Enterprise Value changes as WACC and terminal growth assumptions move. Learn why it matters and which assumption swings value more.
How to Build a DCF Sensitivity Table for Interviews (Step by Step)
A step-by-step guide to building a two-way DCF sensitivity table varying WACC and terminal growth rate, with a worked example you can use in interview prep.
Non-Operating Items in a DCF: Minority Interest, Associates & the Equity Value Bridge Explained
Why Enterprise Value from a DCF is not Equity Value — how minority interest, associates, and preferred stock bridge the two, explained for interview prep.
How to Answer the Enterprise Value to Equity Value Bridge Question in an Interview
How to answer the Enterprise Value to Equity Value bridge question in an interview — the right order, the sign logic for minority interest and associates, and common traps.
What Are Real Options in DCF Valuation? (Expand, Abandon, Delay)
Real options explain why a standard DCF can undervalue a business. Learn how the options to expand, abandon, or delay a project are priced and added to NPV.
How to Calculate a Real Option Value in a Finance Interview
Step-by-step walkthrough of how to calculate the value of a real option (expansion, abandonment, delay) using a probability-weighted decision tree, interview-ready.
Cases
Advanced Case Study: Discounted Cash Flow (DCF) Valuation
Valuing a company using Discounted Cash Flow (DCF) analysis is one of the most fundamental yet complex methods in corporate finance. This case study will take you through a full DCF valuation process.
Full DCF from Scratch
As a financial analyst, you're asked in an interview: "Walk me through how you would build a full discounted cash flow (DCF) valuation from scratch — project the unlevered free cash flows, determine the discount rate, estimate a terminal value, and bridge the result down to an equity value per share." Walk through how you'd answer that question, using a five-year operating forecast to build the complete model end to end.
Sensitivity Analysis: WACC vs. Terminal Growth Rate
You've just finished building a DCF valuation and your MD asks how confident you are in the output. Build a sensitivity table that varies both your discount rate (WACC) and your terminal growth rate assumption, and tell her which of the two assumptions moves Enterprise Value more.
DCF with Non-Operating Items
You've built a DCF and arrived at an Enterprise Value. Before you can get to a per-share equity value, walk through the full non-operating adjustment stack: net debt, minority interest, investments in associates, and preferred stock. Compute the diluted equity value per share.
Real Options in DCF
As a valuation analyst evaluating a growth-stage company with significant strategic flexibility, you are tasked with explaining why a standard discounted cash flow (DCF) can undervalue a business, and using real options thinking to quantify the extra value created by management's option to expand a project.