Walk Me Through a DCF - Investment Banking Interview Question

[@JHo.sounds]

Hands down the clearest video I have seen on this topic. Well done 👏👏👏

[@FinanceableTraining]

Thanks so much. For daily content just like this, check out our Instagram (@survivefinance) instagram.com/survivefinance?igshid=YmMyMTA2M2Y=

[@sthandolanga6056]

I agree

[@willionaire30]

This was a tremendously helpful video! I have completed numerous DCF models, but when describing how to walk through a DCF I tend to run into the issue of going too far into the weeds. This helped simplify my thinking drastically.

[@FinanceableTraining]

Glad you found it helpful Will!

[@Manselus-uy3kz]

The market trend can turn around very quickly. In fact, the indexes often switch from a bear market to a bull market when the news is at its worst and the mood of investors is at its lowest point. I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?

[@TaniaLato-ky4wo]

Investors should be cautious about their exposure and be wary of new buys, especially during inflation. Such high yields in this recession is only possible under the supervision of a professional or trusted advisor.

[@Janise-pg8yr]

True, initially I wasn't quite impressed with my gains, opposed to my previous performances, I was doing so badly, figured I needed to diversify into better assets, I touched base with a portfolio-advisor and that same year, I pulled a net gain of 550k...that's like 7times more than I average on my own.

[@Janise-pg8yr]

Angela Lynn Shilling a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.

[@jp28210]

The best DCF explanation that i've ever watched. Perfectly structured and detailed. Thank you so much

[@FinanceableTraining]

Glad it was helpful!

[@priyankapandya7868]

Best walk-through of DCF I've watched! Really breaks things down. Super simple to understand.

[@FinanceableTraining]

Thanks so much Priyanka! Really appreciate the kind words and glad you found it helpful

[@FinanceableTraining]

Excited to launch our Walk Me Through a DCF video which boils the question down to 5 simple steps!

[@davidecimo3728]

The best video on DCF on KZbin !

[@mikekimpel4329]

Thanks so much Davide!

[@factofmumbaikar9371]

Can't explain in words , sir how great you are ❤, i am thankful from my depth of heart, please upload more video like this , love from india 🎉

[@brettkaufman6686]

This was so straightforward and digestible, everything clicked after watching this. Thanks so much !!

[@FinanceableTraining]

So glad to hear that Brett! As an aside, I think you’ll love our courses if you liked this video: courses.finance-able.com/ 😉

[@broplzjuststop]

Best walkthrough I’ve seen, perfect refresher before interviews.

[@FinanceableTraining]

Glad you found it helpful. Best of luck with the interviews!

[@sonaliibishtt]

thank you sir. Up until now I knew the pieces of a DCF , this explanation helped to solidify my understanding of the process of a DCF.

[@FinanceableTraining]

Really glad you found it helpful!

[@estyanike]

I really enjoyed all the explanation you gave. Very simplified and insightful. I will.appreciate if you can through more ligjt in another video on the following: 1. Do a video on time period less than 1 year from the purchase date in discounting or calculating thr NPV 2. Calculate cost of equity for a private company, given Unlevered and levered beta of comparable companies. Thank you. Esther

[@samriddhistudy]

this is great, really seniors like you and ashwath damadoran make investment banking bearable thank you

[@FinanceableTraining]

Glad it’s helpful…trying to make this stuff clearer

[@yogeshgawande4604]

As you said in the beginning the most common way is to calculate unlevered cfs. What changes would one need to do in case of levered cfs? Subtract intt amount from ebit?

[@mk00744]

A simple and clear explanation. Thank you.

[@mattfranks7546]

Great video. Thanks for taking the time to make these!

[@FinanceableTraining]

Thanks so much. We have even deeper dives into this and walk me through an LBO in our Analyst Starter kit articles: finance-able.com/analyst-starter-kit/ definitely check these out when you have a sec @matt franks

[@jiortega365]

Hey man, thank you so much for this video, really helpful stuff. New subscriber 👍

[@FinanceableTraining]

Glad it was helpful. Btw, happy to give anyone a free copy of our monster IB prep guide…just follow us on Instagram (@survivefinance) and shoot me a dm with ‘IB Prep Guide’ as the message

[@abhishekmutrashi5106]

EBIT is profit before tax then why we subtract (1-Tax) again while calculating FCFF ??

[@FinanceableTraining]

That allows us to capture the tax deduction from the depreciation expense (ie the depreciation, tax shield)

[@rachelbollinger7979]

The best DCF video !

[@FinanceableTraining]

Thanks so much Rachel. Let us know if you have any questions!

[@algierlagapa8782]

Nice video. Keep going!

[@FinanceableTraining]

Appreciate it Algier. If you liked this video, definitely check out our deep dive guide on the same topic here: finance-able.com/walk-me-through-a-dcf/

[@shadeoyewole42]

This was really useful!

[@FinanceableTraining]

Thanks so much!

[@TheWaspist]

Best video on dcf

[@FinanceableTraining]

Thanks so much! :)

[@TechnoHacker1000]

great video! Hopefully i crush my interview

[@FinanceableTraining]

Best of luck!

[@excelmaster8651]

That was cool and simple. Thank you for sharing

[@bensussman3056]

Great video. Thank you

[@FinanceableTraining]

Glad you liked it!

[@Vromko]

Great video. Thank you 👍

[@VathanaPoev]

I am not sure why we need to add cash back in step 5 as the enterprise value (Total Asset Value) already includes cash. It sort of violates the accounting equation of A = L + E. Please let me know if I am wrong. Thanks!

[@guilhermemarinho1887]

Thanks

[@FinanceableTraining]

Aiming for Investment Banking, Private Equity, or Investment Management Roles? Ramp up faster with our (free) Finance Analyst Starter Kit! - finance-able.com/analyst-starter-kit/ or check out our courses at courses.finance-able.com/

[@TrackHawk7]

Thank Y🐱u

[@businessaccount3177]

great explenations thank u bro

[@ericpeng4535]

Awesome video!

[@nikkananda]

shouldn't the step 3 be step 2? because step 2 requires 'r' (preptuity method) which is WACC which is being calculated in step 3

[@FinanceableTraining]

We’ve set this up to be the cleanest answer. You could provide an interview and it’s work for thousands and thousands of people. Of course, there are always variations that you could come up with, but I think if you stick with this, you’ll be in a good spot

[@brothertheresa]

nice!

[@rachitbharti6254]

Cleeeaann

[@FinanceableTraining]

🙏🙏🙏

[@mabelelecarroll978]

Hall Jessica Clark Thomas White Donna

[@KennethAustin-m2d]

Young Paul Moore Paul Miller Michael

[@dhruvshahane2059]

Thank you for this video! It really helped me understand DCF better.

[@FinanceableTraining]

Glad it was helpful!

[@agb7371]

OMG! Never seen such a master class explanation for the most complicated stuff in finance. Thank you Sir!

[@FinanceableTraining]

Glad you found it helpful. We have SO much more free content here: finance-able.com/analyst-starter-kit/

[@JavierTovarAndreu]

TOP! Thx!

[@FinanceableTraining]

For more interview questions, check out our Twitter (@financeable1) where we post a daily interview question and a weekly challenge question!

[@RhondaBlanchard-b6f]

Hernandez Scott Davis Linda Martin Eric

[@shreyashmaheshwari9895]

This is amazing, please keep doing god's work. You will help someone land their dream job one day!

[@FinanceableTraining]

That’s the goal! 🙂

[@dishonb188]

Where do you get the EBITDA Multiple from?

[@gauthier3946]

nice video really helped me

[@FinanceableTraining]

Glad to hear!

[@DrArtorias]

Awesome DCF interview answer strategy. Really appreciate the clear framework approach

[@FinanceableTraining]

Glad it was helpful!

[@seleannia4511]

Explanation are beyond this world! Thank you very much.

[@FinanceableTraining]

You're very welcome!

[@barbarab.9235]

this is hands down the best DCF explanation ever - thank you!

[@FinanceableTraining]

Thank you so much! Glad you found it helpful!

[@josephselwan1652]

very good video

[@FinanceableTraining]

Thanks Joseph!

[@virginiaghezzi1377]

This is amazing

[@FinanceableTraining]

Glad it was helpful!!

[@austindachickmagnit]

So, the enterprise value is the sum of all the cash flows present and future?

[@FinanceableTraining]

That’s correct

[@mohitnahata9576]

Great video, really helpful

[@FinanceableTraining]

Really glad to hear it was helpful! If you liked this video, you’ll love our courses: courses.finance-able.com/

[@finncocoman3164]

Clear and concise video man. Helping me a ton

[@FinanceableTraining]

Glad it was helpful!

[@natekim1908]

Hello ~ quick question: to get to unlevered FCF, would you add back other non cash expenses besides D+A such as goodwill amortization or stock comp? Thanks a ton!

[@KaiYamamoto-t1r]

Loved this content!

[@FinanceableTraining]

Thank you so much!

[@adamelizondo6203]

What are your personal thoughts on WACC and whether or not it should be used? I have heard many investors completely disregard WACC and say its a useless discount rate.

[@FinanceableTraining]

WACC is a super helpful conceptual framework, but it can result in false precision/confidence if taken at face value

[@karl-williamnietert408]

Just ask ChatGPT