What are the line items for a DCF model? Sales COGS Gross Profit
SG&A EBITDA Depreciation Amortization EBIT Tax rate Tax-effective EBIT
Plus: Depreciation and Amortization Less: Capital Expenditures Less: Additions to Intangibles +- Changes in Working Capital Unlevered FCF
What are the value dri...
Plus: Depreciation and Amortization
Less: Capital Expenditures
Less: Additions to Intangibles
+- Changes in Working Capital
Unlevered FCF
What are the value drivers of a DCF model? ✅Sales Growth
COGS (as a % sales)
SG&A (as a % sales)
EBITDA Margin
CapEx (as a % of sales)
Depreciation (as a % of CapEx)
Additions to Intangibles
Amortization (amount)
Changes in Working Capital (as a % of Sales)
What are the steps in a DCF model? ✅1. Input the Unlevered FCF line items
2. Calculate the historical ratios and appropriate growth rates
3. Forecast net sales for the projected years
4. Project future operating expenses
5. Calculate totals
6.. Project Capital Expenditures & Depreciation
7. Project additions to intangibles and amortization
8. Make reasonable assumptions about future working capital requirements
9. Calculate unlevered free cash flow
10. Add "steps" to your assumptions
11. Calculate the NPV of the unlevered free cash flow
12. Calculate the terminal value
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller twishfrancis. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.49. You're not tied to anything after your purchase.
