Public Course

Discounted Cash Flow (DCF) Valuation

Regular price $850.00 USD
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  • What you'll learn
  • Venue
  • Prerequisites
  • Reviews
  • What you'll learn
  • DCF Valuation

    Participants learn how to build a discounted cash flow valuation model. The session starts with an overview of the valuation methodology, and the steps required in setting up a valuation model. We then focus on the calculation of free cash flow. A detailed ratio analysis is used to establish the reasonableness of the forecasts and to identify when the target company reaches steady state.

    We analyze the weighted average cost of capital, calculate terminal values, using both the exit multiple method and the perpetuity growth method. We discount the free cash flows to arrive at enterprise values and calculate the implied share price. Once the valuation is complete participants perform several checks on the analysis using key ratios, and sensitivity and scenario analysis.

    Learning outcomes

    • Calculating unlevered free cash flows
      • Drivers of cash flow
      • Ratio analysis
    • Weighted average cost of capital
      • Optimal capital structure using peer analysis
      • Establishing the company’s forward-looking cost of debt
      • Cost of equity: understanding the risk-free rate, the equity risk premium and beta
      • Unlevering and re-levering the beta
      • Calculating WACC for the case company
    • Calculating the terminal value
      • Perpetuity growth (Gordon Growth Model) method
      • Exit multiple method
    • Building a discounting model
      • Mid-year adjustments
    • Calculating enterprise and equity values
    • Sanity checks 
      • Reinvestment rate and ROIC
      • Implied multiples and growth rates
      • Percentage of value in the terminal period
  • Venue
  • London: Tenter House, 45 Moorfields, London EC2Y 9AE

  • Prerequisites
  • A solid understanding of the topics covered by our courses in Financial Statement Analysis and Financial Modeling are desirable:

    • Financial Statement Analysis
    • Financial Modeling
      • Financial Modeling - Fundamentals
      • Financial Modeling - Cash Sweep and Troubleshooting
      • Financial Modeling - From Scratch

    We also recommend delegates possess fundamental valuation skills.

    • Valuation Fundamentals and Trading Comparables
  • Reviews
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    Who should attend?

    New hires who have joined the firm late and missed the in-house program

    Individuals looking to fill a knowledge gap

    Experienced bankers looking to refresh their technical skills

    Teams employed in financial strategy roles from non-banking corporations

    Graduates preparing to interview for a role in the finance sector

    Students at business school and looking for a career in finance

    What to use

    You need to use a Windows-based laptop for the training with Excel and Adobe installed on your system to access your course files. Our teaching materials are designed for PCs and not MAC based systems. Download details for the necessary files will be emailed a few days before the course. You can use any version of MS Excel in class. Please inform us of your Excel version when booking your course.

    Ask our trainers

    If you have any questions about the course content, you can email our experienced trainers for any further questions

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