THE VALUATION SCHOOL

Prereqinsites VMConcept,
re B

DCF Modelling
- -

Session 1 -> Kab

Khatam?
-
-
-
.

certificate?
-&

SUBSCRIBE KARO FATAFAT!

-
.
 THE VALUATION SCHOOL

How we proceed?
Start straight with modelling

Build foundation with basic DCF

Adjustment for complexities

SUBSCRIBE KARO FATAFAT!

 FCAF----...
DCF=o n=
Aron
②
K
⑮n
 ↑ ↑
&
THE VALUATION SCHOOL B AHVT -

SARA
PAISA 3 Pillars of DCF PAISA
#
-

↳ I

I carry growth
man
.
=
RI
and &
th KHATRA
the ⑨
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

I
CASH
(PAISA)

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

D
HAND
k/
VALVE Future Cash Flows
↓ ↳
-
>
= *

-count!

SUBSCRIBE KARO FATAFAT!

Enterprise # THE VALUATION SCHOOL
FCFF
-
-
l FCFE
Equity,Choosing Cash Flows
-
->
->

Cash Flow?
-
Unlevered Free Cash Flow
-

Discount Rate? WACC

->
->
-

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Choosing Cash Flows

Consistency is the key through out valuation
->

1
UFCF =
Cash flows available to all capital providers
-
Enterprise
Value

↳ operating
WACC Cost of capital from all capital providers
-

- Tax
Income. ->
1

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Choosing Cash Flows

Consistency is the key through out valuation

FCFE Cash flows available to all Equity SH Equity

Ke Cost of Equity Value

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Growth

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

how long to forecast?

Going Concern

Should we forecast indefinitely?

till 16,384 columns in excel?
-

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Two parts of forecast

Explicit forecast period
Higher
growth
-
than GDP) Industry
④

AHefty fi

Actual (X)(X)(N)
⑭ (X)

3??
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

Explicit Forecast period

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Explicit forecasting period

AB
Terminal Value RVK
↑- AVRTEZ
·
NAH
I
i
I
I

-
Gordon's Growth
-
Exit multiples
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

Terminal Year
↑ sensitized to the value 85 - 15
④
-

①
#
=

⑤
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

RISK
8 piscraie↓
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

Risk in growth of cash flows

WACC = Weighted Any cost of capital.

#- (Ke*We)+(Kd*Wd) - -

SUBSCRIBE KARO FATAFAT!

 THE VALUATION SCHOOL

Risk in growth of cash flows

- 1442
Ke - Cost of Equity -n

om
-13- 5 - 3
Rf+(ERP)*Beta
--

6 31.
X1.5
10.5%,
=

-.
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

Risk in growth of cash flows

Ke - Cost of Equity

MI shares to
Who's perception?
I
·
④ Marginal Investors
-

AND
Influence
↓
E
-
to trade
willingness -> &S - well
versified
SUBSCRIBE KARO FATAFAT!
 THE VALUATION SCHOOL

Risk in growth of cash flows

Forward
⑥
->
Kd - Cost of Debt
->
working
Bond S
-

Explicit or Implicit?
I HistoricalBond issue 7%

-I
I
2019- -
18
- No Tax

#2023. -

1*7.
market-> #t
SUBSCRIBE KARO FATAFAT!
 Rules of Game-
Basics.
-

-
S

watch financial modelling

↳ All session

watch Dof
Modelling-Anondel
-

Google diescompanies
-

-.
-

Practice &
practice!
-
 THE VALUATION SCHOOL

What to do next?
Roll up your sleeves first! war
Reg zoom
-
serrios
-
@thevaluationschool
mindblowing
-
* -
-

thevaluationschool ->
facts 3
->

content
-->

vermaparth -
a

->
->

SUBSCRIBE KARO FATAFAT!

- Ghanti