Discounted Cash Flow (DCF) Analysis Excel Template
Originally published: 25/04/2022 07:44
Publication number: ELQ-34133-1
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Discounted Cash Flow (DCF) Analysis Excel Template

This is a detailed and easy-to-use financial model with detailed Discounted Cash Flow (DCF) valuation calculations that can be used for any company.

This is a detailed and easy-to-use financial model with detailed Discounted Cash Flow (DCF) valuation calculations. This is a modular financial model meaning that relevant calculations are separated into separate tabs. More complex models at the most basic level are separated into 1) inputs; 2) calculations; and 3) outputs. In simplistic models, these items are often grouped into a single tab.

I have used the following structural approach for every model that I have built, which users have always found to be clean, practical, easy-to-follow and user-friendly. Sections may vary somewhat depending on the complexity of the model but the basic layout remains the same. The sections of this model template are as follows:
1. Title Page: A brief description of the model’s purpose. Contact information can also be included here.
2. Assumptions Tab: Inputs and assumptions that drive the model.
3. Financial Forecast Tab: Financial projections that drive the valuation. In this model, the forecast is illustrative only and can be replaced with the user's own forecast. The most important items that are needed from any financial forecast for valuation purposes are: EBITDA, depreciation, interest expense, capital expenditures and changes in non-cash working capital. Current capitalization amounts are also needed.
4. WACC Tab: The information in this tab is illustrative as well and should be replaced with actual comparable companies that are relevant to the user's situation. The weighted-average cost of capital (WACC) is used as the discount rate in the DCF valuation.
5. DCF Valuation Tab: A simple and easy-to-follow calculation of the net present value (NPV) and implied equity value using information derived from the other tabs. The terminal value based on either an exit multiple or perpetual growth is also calculated here.
6. Sensitivities Tab: Sensitivities that the user can rely on to test the robustness of the valuation.

The model template utilizes 10 years for the forecast period.

Again, this is a detailed but user-friendly model that can be used to perform cash flow valuation for any company.

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