My first DCF...Please Tear it Apart
Would appreciate some advice/criticism/comments from you guys.
I had to do a DCF for a class and decided to try and build one from scratch. I used the Macabacus model as a reference for a lot of the formulas, and although it took a while to build the whole thing, I was able to take away a good amount from the experience. The company is Corning Inc. (GLW)
Any feedback or comments would be appreciated. Thanks in advance.
| Attachment | Size |
|---|---|
| DCF GLW Final.xls 53.75 KB | 53.75 KB |
no advice but a bump
looks so messy bro
Yeah it can be tightened up for sure, I had some problems organizing it because I put it together from scratch
The formatting for the number of decimal places is inconsistent. Also some of your cells are formatted as accounting, some numbers, and some general.
On your cash flow, the retirement of LT debt has negative numbers formatted with parenthesis and red numbers with a negative sign in front.
Generally just clean up the formatting and make everything look more uniform.
formatting inconsistent financials aren't linked and a lot of the numbers are inconsistent you are also modeling negative working capital numbers in your cf but are adding them back in your fcf calculation modeling buybacks but not doing anything to share count
Thanks, appreciate you taking a look. I plan on starting over and cleaning the whole thing up once finals end.
Just as a general starting point, what line items to do you follow when you start the model? Do you use the Bloomberg statements or go to the 10k of the company and use those? They are often different and make it inconsistent if you try and use both
Just took a quick look; Why are you adjusting CFO with hard coded numbers in working capital? They seem all wrong. E.g. A/R decreased from '12 to '13, yet you are adjusting CFO by subtracting adjustments for A/R in '13 which would indicate an increase in A/R. Again, inventory increased by 219, not 247 (hard coded in for some reason).
Plus, many of your assumptions are not linked to the properly correlated driver (Capex/Sales is linked to '13 throughout the entire forecast).
I'd suggest building out your model with some generic numbers and making sure they are all clean and linked, and then applying specific company financials. Honestly, it's kind of a mess as is.
Also, only use Bloomberg for sanity check. Not primary source, use Ks.
Thanks, I know there are a lot of problems with it but hope to fix most of them with my second try.
When you are covering a new company do you build a model from scratch for each one or do you have a generic model you use and just adjust each statement for the company specific line items?
Definitely wouldn't build out a new model, unless perhaps you're looking at a company in a completely different and unique industry, such as financials.
Normally have a template model and make adjustments as needed.
Is it necessary to include every line item...even the small insignificant ones...that are given in the 10k on each statement so that it is consistent for the cash flows statement, or is it even OK to combine some items.
It seems like using one model and making adjustments for new companies would cause problems with adding tons of lines on each statement.
Sorry if these are dumb questions, I'm brand new to modeling and just starting to wrap my head around how all three statement tie together. Thanks for the advice.
Also, if anyone has a good model to take a look at to get a better understanding I would appreciate sharing the link or document.
Corporis sit numquam et possimus eius eum nesciunt et. Dolor natus quia dolorem quis. Illum eum omnis eos aut natus fuga quo. Facilis quos ullam dolorem nulla ad porro. Sed fugiat id aut sed est illo qui. Sed praesentium ipsum nisi dolores velit et aliquam. Sed dolor aliquid aperiam error sit.
Harum totam mollitia est. Eius voluptatem possimus aliquam molestiae optio. Qui voluptatum est iste voluptas rerum repellendus qui. Consequatur dolores tempore consectetur amet aliquid amet harum. Rem distinctio sed maxime provident. Dolor dolores at porro autem earum aut ducimus.
Non et deleniti dolorem et rerum. Et explicabo ab qui officia quos vel. Velit totam quod non omnis assumenda voluptatem. Dolorem et aliquid mollitia tempora. Aut quo odit fuga nemo blanditiis iste non.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...