Finance Models

Discounted Cash Flow Analysis

What is a DCF Model?

The Discounted Cash Flow Model, or “DCF Model”, is a type of financial model that values a company by forecasting its cash flows and discounting them to arrive at a current, present value.

The Steps to complete the DCF valuation are

1. Free Cash Flow
2. Discount Rate
3. Perpetual Growth Rate
   The perpetual, or constant growth rate, is the growth rate that free cash flow (FCF) is going to grow at into perpetuity (forever).
4. Terminal Value
5. Shares Outstanding
6. Discount Back and Find Intrinsic Value
7. Sensitivity Analysis
8. Margin of Safety

Calculate DCF Model Value

Here are some of the references for training

Value a company using DCF Model

DCF Model Tesla example (video)

DCF Model Step by Step Guide (video)

DCF Model Excel Steps

Bamsec.com data

Other Valuations

Relative Valuation

Understanding a Retracement

A retracement refers to the temporary reversal of an overarching trend in a stock's price. Distinct from a reversal, retracements are short-term periods of movement against a trend, followed by a return to the previous trend.

How do you identify stock buying signals?

By plotting a 200-day and 50-day moving average on your chart, a buy signal occurs when the 50-day crosses above the 200-day. A sell signal occurs when the 50-day drops below the 200-day. SMA 20/50/200