Financial analysis
How to Value a Company Using a Discounted Cash Flow Model
A DCF is not a formula you feed numbers into. It is a story about a business, written in cash flows. This walk-through builds one step by step.
5 min readRead more
DCF
15 pages carry this tag.
Analysis
ESG analysis
How to Integrate ESG Factors into a Company Valuation
A common approach is to value a company and then add or subtract a little for its ESG score. A better approach puts each material ESG issue into the model where it actually changes value.
5 min readRead more
Financial analysis
Terminal value dominates valuations, and why that should worry you
Analysts spend hours forecasting five years of cash flows, yet most of a DCF's answer usually comes from one number at the end. Here is why, and what to do about it.
7 min readRead more
Financial analysis
How Small Changes in WACC Affect a Company's Estimated Value
WACC looks like a precise input, but it is built from four estimates, each with a range. A one-point change can move a value by 10% to 25%, depending on when the company's cash arrives.
5 min readRead more
Concept Guides
Concept Guide
Time value of money
Why ₹100 today is worth more than ₹100 next year: future value, present value, NPV, annuities, compounding and perpetuities, with the formulas.
8 min readRead more
Concept Guide
Cost of capital (debt, equity, WACC)
Estimating the cost of equity with CAPM, the after-tax cost of debt and WACC for an Indian company, with a worked example.
11 min readRead more
Concept Guide
Capital budgeting (NPV, IRR, payback)
How companies decide which long-term investments to make: NPV, IRR and payback, incremental cash flows, MIRR, real options and capital rationing.
9 min readRead more
Concept Guide
DCF: theory and mechanics
How a DCF values a business: FCFF and FCFE, building the model step by step, multi-stage models, sensitivity tables and ESOP dilution.
12 min readRead more
Concept Guide
Terminal value approaches
The two ways to estimate terminal value, Gordon growth and exit multiple, how to cross-check them, and why it dominates a DCF.
9 min readRead more
Concept Guide
Common DCF mistakes
Ten common DCF mistakes, from a terminal growth rate above WACC to stale betas and false precision, and how to avoid each one.
8 min readRead more
Concept Guide
Reverse DCF: what the price already assumes
Start from today's price and solve for the growth it needs. How to run a reverse DCF, an illustrative worked example, and how to judge whether the implied growth is realistic.
7 min readRead more
Interactive Lessons
Lesson
Build a DCF, step by step
Start from scratch and build a complete discounted cash flow model for a real Indian company, one concept at a time.
Read more
Calculators
Calculator
Present value calculator
Find the present value of a future sum, given a discount rate and time horizon.
Read more
Calculator
WACC calculator
Compute the weighted average cost of capital from equity and debt weights, their costs, and the tax rate.
Read more
Calculator
DCF sensitivity calculator
Two-stage DCF model with live sliders, a 5x5 sensitivity grid across WACC and terminal growth, and Excel export.
Read more
Related topics: Valuation, Relative valuation, Cost of capital, Financial statements, Cash flow, Earnings quality, Red flags, Ratios