hvkshetry /dcf-model — Discounted Cash Flow Valuation
Produce an intrinsic valuation with explicit assumptions and sensitivity analysis.
MCP Tool Map
- Company financials:
sec-edgar.sec_edgar_financial,sec-edgar.sec_edgar_filing - Market/rates context:
market-intel-direct.get_market_snapshot,market-intel-direct.get_fred_series - Illiquid asset context:
finance-graph.list_assets,finance-graph.list_valuation_observations
Workflow
Step 1: Revenue Build-Up
- Establish base revenue from latest filings or operating data.
- Project revenue growth over 5-10 year explicit forecast period.
- Document growth assumptions with supporting evidence.
Step 2: Margin Progression
- Model operating margin trajectory from current to steady-state.
- Project capex, depreciation, working capital changes.
- Derive unlevered free cash flow for each forecast year.
Step 3: WACC Derivation
- Risk-free rate from FRED treasury data.
- Equity risk premium and beta estimation.
- Cost of debt and target capital structure.
- Size premium and company-specific risk adjustments where applicable.
Step 4: Terminal Value
- Calculate terminal value using perpetuity growth method.
- Cross-check with exit multiple method.
- Terminal growth rate must be justified relative to long-term GDP.
Step 5: Sensitivity Analysis
- Two-way sensitivity on WACC and terminal growth rate.
- Additional sensitivity on revenue growth and margin assumptions.
- Present range of implied values.
Step 6: Output
- DCF summary with key assumptions table.
- Yearly cash flow projections.
- Sensitivity matrix.
- Implied valuation range with confidence assessment.
- Data gaps and assumption risks.