Valuation and Simple Discounted Cash Flow

Walking through the essential principles of valuation and how a Discounted Cash Flow Model works. In finance, we use valuation to determine the price we are willing to pay for assets and companies. In this video, we discuss how to discount in Excel, how to calculate free cash flow, and how to build your own DCF model.

The DCF is the first model you need to learn when you're preparing for investment banking recruiting. You'll need to walk through the mechanics of one in an investment banking interview and you should be able to build one from scratch by the time you hit the desk as an analyst.

0:00 - Intro
0:24 - What is Valuation?
1:45 - The Discounted Cash Flow
2:55 - How to Discount in Excel
3:59 - Simple DCF Template

Peak Frameworks is a business career prep service started by Matt Ting and Patrick Fong, who have each spent several years working in investment banking and private equity in New York and Silicon Valley. Matt and Patrick met at Evercore, a top tier investment bank, and over the years have tutored and coached dozens of candidates to land their dream business job.

#Valuation #InvestmentBanking #DCF

[boss]

Bro this video was amazing. I've looked at so many DCF videos and always get confused but you've explained it so well and in such a nice way that I think I'm actually getting the hang of it. You just got a new subscriber fam & I'll continue watching these videos.

[invest_maktab]

The best explanation I saw. With really clear examples

[jonathanfraga]

Thanks Matt, super helpful intro to the DCF. Helped give me the perspective to launch my in-depth prep and understand what I'm looking at without feeling completely lost and clueless.

[jingyewang]

Thank you for explaining succinctly DCF. It helped me a lot to prepare for my mba interview!

[TheMinimalistPortfolio]

Great stuff! Exactly the right amount of detail without going too far in depth

[HICHAM-FINANCIER]

Thank you so much for the video, just one question why we don't use EBIT or even better EBI and we deduct only investments and increase in working capital?

[dillonkay]

DCF is a pretty simple answer. The real meat is building up the three statement model. Consider making a high level video covering this?

[dylanrocksify]

Incredibly helpful content, post more similar videos!

[nycbankers]

Thank you so much I’m just a non finance major trying to break the industry

[soeunbae]

I usually don't leave comment but it was really easy to understand and clear. Thank you!

[ryanhillier]

this was a super clear example.. thanks man

[christophermonin]

This is incredibly helpful, thank you!!

[tomaszjankowski]

I've got an interview coming up and this cleared things up a lot so thanks!

[zensorrow]

This video is excellent - thank you friend

[EstherYu]

This is perfect - thank you for the video! You talked so fast, I change the playback setting to 0.75

[ppxqwrp]

Thanks 👌🏾 I'm looking forward to a career in ib, im gonna attend University of Saint Gallen next year 😁

[dannyperrier]

I love the content, would you be able to demonstrate this model on a working company from yahoo finance ?

[marina.]

Hi, Where do you get the EBIDTA multiple of 10X ? Is that a constant?

[adamhamid]

What would be the NPV equivalent in this DCF?

[flint]

why did u use the ebitda multiple for calculate the terminal value, instead of fcf multiple of the 10th year?