Excel DCF Modeler

Overview

Creates professional DCF valuation models following investment banking standards with WACC calculations and sensitivity analysis.

Prerequisites

• Excel or compatible spreadsheet software
• Historical financial data for target company
• Industry comparables for WACC estimation

Instructions

1. Create assumptions sheet with revenue growth, margins, WACC, and terminal growth rate
2. Build free cash flow projections (5-year forecast)
3. Calculate terminal value using Gordon Growth Model
4. Discount cash flows and terminal value to present value
5. Sum to get enterprise value, subtract net debt for equity value
6. Add sensitivity tables for key assumptions

Output

• Complete 4-sheet DCF model with assumptions, projections, valuation, and sensitivity
• Enterprise value and equity value per share
• Sensitivity analysis on WACC and terminal growth rate

Error Handling

Error	Cause	Solution
#DIV/0! in terminal value	WACC equals terminal growth	Terminal growth must be less than WACC
Negative FCF	High CapEx or WC needs	Review assumptions, may need different model
Unrealistic EV	Extreme growth assumptions	Benchmark against industry comparables

Examples

Example: Value a SaaS Company Request: "Create a DCF model for a $50M ARR SaaS company growing 30%" Result: 4-sheet model with 5-year projections, 12% WACC, 3% terminal growth, sensitivity tables

Example: M&A Valuation Request: "DCF analysis for acquisition target" Result: Model with synergy adjustments, scenario analysis, and per-share valuation

Resources

• Damodaran Online DCF Resources
• WSO DCF Modeling Guide
• {baseDir}/references/dcf-formulas.md for Excel formula templates