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5.2 Valuation Techniques (Wall Street Methods)

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Module 5: Financial Modeling – Expanded » 5.2 Valuation Techniques (Wall Street Methods)

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1. Discounted Cash Flow (DCF) – The Gold Standard

Component Formula Example Pro Tip
Unlevered FCF EBIT*(1-Tax) + D&A - CapEx - ΔNWC Use XNPV for irregular cash flows
Terminal Value [FCF*(1+g)]/(WACC-g) Gordon Growth vs. Exit Multiple
WACC (E/V)Re + (D/V)Rd*(1-T) Bloomberg terminal data inputs

Case Study:

  • Valuing a Series B startup with:

    • 3 revenue scenarios

    • Probability-weighted WACC

2. Comparable Company Analysis (Comps)

  • Selecting peers:

    • Market cap range

    • Growth profile

    • Geography

  • Key multiples:

    • EV/Revenue

    • EV/EBITDA

    • P/E

Excel Magic:

excel
=INDEX(CompsTable, MATCH(Ticker, Tickers, 0), MATCH("EV/EBITDA", Headers, 0))

3. Precedent Transactions

  • Premium analysis:

    • 30-day vs. 60-day avg. premiums

    • Synergy assumptions

Assignment:

  • Value Tesla vs. Legacy Automakers using:

    • DCF (5-year projection)

    • Comps (EV/Production)

Added on July 08, 2025
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Course Overview Module 1: Foundations of Spreadsheet Mastery – Expanded Module 2: Advanced Formulas & Functions – Expanded Module 3: Data Visualization & Business Intelligence – Expanded Module 4: Automation & Efficiency – Expanded Module 5: Financial Modeling – Expanded Module 6: Collaboration & Enterprise – Expanded Capstone Module: Real-World Mastery Projects
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