Determine intrinsic value of a firm using Excel and free cash flows. Net present value (NPV) and internal rate of return (IRR) are helpful to determining company valuation using Excel.
- [Instructor] Making forecasts using Excel is … an important skill but we can also go one step deeper … and create an associated business valuation … using a discounted cash flow model. … Excel is the standard for such models. … I'm in the 04_03_Begin Excel file. … Now, we've made a series of assumptions … about this particular company. … We've got projected free cash flows over the next five years … as well as a projected discount rate based … on the riskiness of the company … and a terminal growth rate that reflects the growth … of the company from the year 2024 on. … Now, in order to determine the value of this firm, … we need to determine the present value … of this sequence of cash flows. … Importantly, we're assuming … that the company has no extra cash on hand right now. … So the value of the firm is solely going to be based … on these free cash flows plus the terminal value. … To determine the value of the firm, … we're going to use the present value formula. … That present value formula's going to take into account …
- List the most common tasks and approaches faced by accountants in their daily lives.
- Determine whether transactions can be exported from Quickbooks to Excel or not.
- Outline the structure that the SUMIF function uses.
- Explain how to measure EBITDA.
- Identify at what level the General Ledger tracks expenses.
- Break down how to construct a business valuation using a cash flow analysis.