excel-dcf-modeler_skill

This skill helps build professional discounted cash flow models in Excel, guiding valuation from assumptions to sensitivity analysis and enterprise value.

Python

7

GitHub Stars

1

Bundled Files

2 months ago

Catalog Refreshed

4 months ago

First Indexed

Readme & install

Copy the install command, review bundled files from the catalogue, and read any extended description pulled from the listing source.

Installation

Preview and clipboard use veilstrat where the catalogue uses aiagentskills.

npx veilstrat add skill jst-well-dan/skill-box --skill excel-dcf-modeler

SKILL.md2.2 KB

Overview

This skill builds professional Excel discounted cash flow (DCF) valuation models that follow investment banking conventions. It produces a multi-sheet workbook with assumptions, five-year financial projections, terminal value, discounted cash flows, and sensitivity analysis. Use it to estimate enterprise and equity value and to produce per-share valuations for transactions or internal analysis.

How this skill works

The skill guides you through creating an assumptions sheet (revenue growth, margins, WACC, terminal growth), then generates five-year free cash flow projections and computes terminal value via the Gordon Growth Model. It discounts projected cash flows and terminal value to present value, sums to enterprise value, and subtracts net debt to derive equity value and per-share metrics. The model also builds sensitivity tables on WACC and terminal growth and flags common errors like WACC ≤ terminal growth or negative FCF.

When to use it

Valuing a company for investment, M&A, or internal planning
Creating a live Excel DCF template for repeatable valuations
Calculating enterprise value and equity value per share
Stress-testing outcomes with sensitivity or scenario analysis
Benchmarking assumptions against industry comparables

Best practices

Start with a clear assumptions sheet and document sources for historical inputs
Ensure terminal growth is materially less than WACC to avoid invalid terminal value
Use five-year forecasts for core projections and justify long-term growth rates
Cross-check WACC against industry comparable companies and adjust capital structure appropriately
Include sensitivity tables for WACC and terminal growth and review outputs for unrealistic values

Example use cases

Build a DCF for a $50M ARR SaaS company with 5-year revenue and margin ramp
Prepare an acquisition valuation with synergy adjustments and scenario variants
Generate per-share valuations for board materials or investor updates
Create a reusable Excel template for rolling valuations across portfolio companies

FAQ

Terminal growth must be lower than WACC; otherwise the Gordon Growth formula produces division by zero or negative terminal value. Lower the terminal growth assumption or reassess WACC inputs.

How do I handle negative free cash flow in early years?

Negative FCF can be valid for high-growth or capex-heavy businesses. Review CapEx and working capital drivers, extend the forecast if needed, and ensure the model reflects realistic recovery assumptions.

How are sensitivity tables built?

The model creates two-way sensitivity tables that vary WACC and terminal growth (or other key assumptions) to show impacts on enterprise and equity value for quick scenario comparison.