Overview

The DCF Valuation Model builds on the 3 Statement
model by adding a business valuation component for investment through the
Discounted Cash Flows method. The DCF Valuation Model links the Income
Statement, Balance Sheet, and Cash Flow Statement together dynamically along
with a DCF Valuation. Included in the template you will find:

• The Income Statement, Balance Sheet and Cash Flow
Statement
• An Assumptions Section with key drivers for the business and a Scenario
Analysis with 3 scenarios
• Supporting Schedules Section for PPE, Working Capital, and Long-Term Debt
• Discounted Cash Flows Valuation
• Graphs to visually display the Free Cash Flow and Intrinsic vs. Market Value

First is the Assumptions sections where Assumptions
are entered in the cells for the projection periods. All assumptions can be
modified to fit specific key drivers of the business to see their impact on the
DCF Valuation Model. You can access the Scenario Analysis from the Case
Selection drop-down menu in cell E7. Up to 5 years of historical data can be
entered into the income statement, balance sheet, and cash flow statement; the
following projected years are driven by formulas from the Assumptions section.
The Supporting Schedules section is all formulas that are tied to the
Assumptions and 3 Statement sections so no editing is necessary. The DCF Model
section consists of a separate set of assumptions to drive the valuation along
with projected Free Cash Flow to arrive at a Terminal Value. This is broken
down further to show Equity and Enterprise values per share. Lastly, the Charts
and Graphs section displays the Free Cash Flow and Intrinsic vs. Market Values
visually. The correlating data is above the graphs and tied to the model with
formulas so they will automatically adjust to any modifications in the model.

All cells in blue font are input cells where custom
information can be entered. All cells in black font are formulas set to streamline
the model. Sections are grouped to condense the model to view sections
individually.
 

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