From the course: Financial Modeling Foundations
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Interpreting a DCF model
From the course: Financial Modeling Foundations
Interpreting a DCF model
- [Instructor] Being able to construct a basic DCF model is important, but it's equally important to be able to interpret that model and understand what it's telling us. So let's go through and refine our DCF model, and then take a look at how we can interpret the results. I'm in the 04_04_Begin Excel file. Now we've got our DCF model. We went through and computed a basic valuation, but let's go through and layer in some additional complexity here. To do this, I'm gonna unhide my formulas from up above, or I should say my income statement, and my balance sheet, really. And we see we've got our income from revenues down through net income, right? Then we've got our balance sheet, and I wanna take into account the value of the debt. So we have the total value of the firm. Next, I need to take into account the debt, and I've gotta look at that debt as of the end of 2025. So my debt will come right off the balance sheet here,…
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