The Vampire Squid

TVS 013 – Discounted Cash Flow Analysis

08.15.2016 - By Alan LiPlay

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Welcome to the first valuation episode! Today we will talk about Discounted Cash Flow (DCF) analysis, one of the most common types of valuation that people in finance use. As promised, please see attached links to an actual DCF model, in addition to more of the granularity of the formula in case you are interested.

DCF Model – http://macabacus.com/valuation/dcf/overview

Detailed DCF explanation – http://www.investopedia.com/university/dcf/

* Intrinsic Valuation of a company

* What is the time value of money?

* Would you rather have $1 today or $1 a year from now?

* Projecting out your cash flows

* What do you do for your terminal value?

* Perpetuity Growth Method

* Exit Multiples

* Why do you have to use a discount rate? What’s an easy to understand example?

* Cons of a DCF Valuation

* Assumptions

* Predictability of cash flows

* Pros of a DCF Valuation

* Intrinsic valuation of a company

As always, please let me know if you have any questions, comments, or suggestions. Email me directly at [email protected] or on the contact form. Also, please subscribe to my facebook page for live updates facebook.com/thevampiresquid. Also follow me on Quora at https://www.quora.com/profile/Alan-Li-1

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