In this course, we’ll look at the various methods for conducting DCF valuations (no growth, constant growth and variable growth), source of input values and when each is appropriate.
We’ll explain the rationale for using free cash flows versus other measures of net resource flows (e.g. dividends, earnings, EBITDA, etc.) when valuing a firm or its common equity. We’ll also learn how to calculate free cash flow (to the firm and to the equity holders) using information from corporate financial statements
Next, we’ll discuss the factors that would need to be factored into a free cash flow projection for a DCF valuation, including but not limited to issues impacting sales growth, margins (net and operating) and leverage (operating and financial).
We’ll also cover the macroeconomic, industry sector and company-specific factors that color the context for cash flow projections (e.g. industry/product lifecycle or competitive analysis).
Next, we’ll learn how to calculate a terminal value for a DCF valuation and discuss issues regarding the sensitivity of a terminal value to assumed growth and discount rates as well as a factor related to the determination of reasonable estimates for those inputs.
We’ll also learn how to calculate the value of a firm and the value of its equity using DCF analysis given the appropriate free cash flow projections and discount rates.
Next, we’ll discuss alternative methods for determining enterprise value and equity value based on either excess cash and non-operating assets or economic profit and invested capital.
We’ll wrap up this course with a look at the components of the widely used valuation ratios and how they are employed in assessing relative value.
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In this course, we’ll look at the various methods for conducting DCF valuations (no growth, constant growth and variable growth), source of input values and when each is appropriate.
We’ll explain the rationale for using free cash flows versus other measures of net resource flows (e.g. dividends, earnings, EBITDA, etc.) when valuing a firm or its common equity. We’ll also learn how to calculate free cash flow (to the firm and to the equity holders) using information from corporate financial statements
Next, we’ll discuss the factors that would need to be factored into a free cash flow projection for a DCF valuation, including but not limited to issues impacting sales growth, margins (net and operating) and leverage (operating and financial).
We’ll also cover the macroeconomic, industry sector and company-specific factors that color the context for cash flow projections (e.g. industry/product lifecycle or competitive analysis).
Next, we’ll learn how to calculate a terminal value for a DCF valuation and discuss issues regarding the sensitivity of a terminal value to assumed growth and discount rates as well as a factor related to the determination of reasonable estimates for those inputs.
We’ll also learn how to calculate the value of a firm and the value of its equity using DCF analysis given the appropriate free cash flow projections and discount rates.
Next, we’ll discuss alternative methods for determining enterprise value and equity value based on either excess cash and non-operating assets or economic profit and invested capital.
We’ll wrap up this course with a look at the components of the widely used valuation ratios and how they are employed in assessing relative value.
In this course, we’ll look at the various methods for conducting DCF valuations (no growth, constant growth and variable growth), source of input values and when each is appropriate.
We’ll explain the rationale for using free cash flows versus other measures of net resource flows (e.g. dividends, earnings, EBITDA, etc.) when valuing a firm or its common equity. We’ll also learn how to calculate free cash flow (to the firm and to the equity holders) using information from corporate financial statements
Next, we’ll discuss the factors that would need to be factored into a free cash flow projection for a DCF valuation, including but not limited to issues impacting sales growth, margins (net and operating) and leverage (operating and financial).
We’ll also cover the macroeconomic, industry sector and company-specific factors that color the context for cash flow projections (e.g. industry/product lifecycle or competitive analysis).
Next, we’ll learn how to calculate a terminal value for a DCF valuation and discuss issues regarding the sensitivity of a terminal value to assumed growth and discount rates as well as a factor related to the determination of reasonable estimates for those inputs.
We’ll also learn how to calculate the value of a firm and the value of its equity using DCF analysis given the appropriate free cash flow projections and discount rates.
Next, we’ll discuss alternative methods for determining enterprise value and equity value based on either excess cash and non-operating assets or economic profit and invested capital.
We’ll wrap up this course with a look at the components of the widely used valuation ratios and how they are employed in assessing relative value.
This course is part 3 of the New York Institute of Finance’s Corporate Finance & Valuation Methods Professional Certificate.
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What's inside
Learning objectives
- Overview of discounted cash flow methodologies
- Elements of cash flow projections
- Discounted cash flow analysis
- Alternate valuation methodologies
- Relative valuation techniques
- Overview of discounted cash flow methodologies
- Elements of cash flow projections
- Discounted cash flow analysis
- Alternate valuation methodologies
- Relative valuation techniques
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Activities
Review valid company valuation methods
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Refresh your memory on using these methods to assess company value, improving your understanding of the course materials.
Browse courses on
Discounted Cash Flow
Show steps
-
Read review materials on DCF methods
-
Review examples of DCF analysis
-
Practice applying DCF methods to hypothetical scenarios
Read 'Discounted Cash Flow: Valuation Modeling with Applications to Leveraged Buyouts and Stock Valuations' by Aswath Damodaran
Show steps
Enhance your understanding of advanced DCF techniques by reading this seminal work on the subject.
View
Investment Valuation
on Amazon
Show steps
-
Read and take notes on relevant chapters
-
Review exercises and case studies
Watch video tutorials on DCF modeling
Show steps
Complement your learning by viewing video demonstrations of DCF analysis.
Show steps
-
Search for relevant tutorials
-
Watch tutorials and take notes
Four other activities
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Work through practice problems on DCF valuation
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Solidify your grasp of DCF techniques by solving practical problems.
Show steps
-
Download practice problems
-
Attempt problems independently
-
Review solutions and identify areas for improvement
Discuss DCF valuation with classmates
Show steps
Engage with your peers to share knowledge, ask questions, and gain new perspectives on DCF analysis.
Show steps
-
Identify a discussion topic
-
Meet with classmates and exchange ideas
-
Summarize key takeaways
Build a DCF model for a real-world company
Show steps
Apply your skills by creating your own model for a publicly traded company.
Show steps
-
Choose a company to analyze
-
Gather financial data and build a financial model
-
Estimate inputs and perform DCF analysis
-
Write a report summarizing your findings
Assist a non-profit organization with financial analysis
Show steps
Apply your DCF skills in a practical setting by helping a non-profit organization assess its financial health.
Browse courses on
Financial Analysis
Show steps
-
Identify a non-profit organization to assist
-
Conduct financial analysis and prepare a report
-
Present your findings to the organization
Review valid company valuation methods
Show steps
Refresh your memory on using these methods to assess company value, improving your understanding of the course materials.
Browse courses on
Discounted Cash Flow
Show steps
- Read review materials on DCF methods
- Review examples of DCF analysis
- Practice applying DCF methods to hypothetical scenarios
Read 'Discounted Cash Flow: Valuation Modeling with Applications to Leveraged Buyouts and Stock Valuations' by Aswath Damodaran
Show steps
Enhance your understanding of advanced DCF techniques by reading this seminal work on the subject.
View
Investment Valuation
on Amazon
Show steps
- Read and take notes on relevant chapters
- Review exercises and case studies
Watch video tutorials on DCF modeling
Show steps
Complement your learning by viewing video demonstrations of DCF analysis.
Show steps
- Search for relevant tutorials
- Watch tutorials and take notes
Work through practice problems on DCF valuation
Show steps
Solidify your grasp of DCF techniques by solving practical problems.
Show steps
- Download practice problems
- Attempt problems independently
- Review solutions and identify areas for improvement
Discuss DCF valuation with classmates
Show steps
Engage with your peers to share knowledge, ask questions, and gain new perspectives on DCF analysis.
Show steps
- Identify a discussion topic
- Meet with classmates and exchange ideas
- Summarize key takeaways
Build a DCF model for a real-world company
Show steps
Apply your skills by creating your own model for a publicly traded company.
Show steps
- Choose a company to analyze
- Gather financial data and build a financial model
- Estimate inputs and perform DCF analysis
- Write a report summarizing your findings
Assist a non-profit organization with financial analysis
Show steps
Apply your DCF skills in a practical setting by helping a non-profit organization assess its financial health.
Browse courses on
Financial Analysis
Show steps
- Identify a non-profit organization to assist
- Conduct financial analysis and prepare a report
- Present your findings to the organization
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