*As I mentioned in the video, here are some further explanations of some of the concepts I brought up:* *Capital Expenditures (CapEx)* - Cash you spend on Plant, Property, and Equipment (PP&E). So Apple spends $100 million on a new office building, that's $100 million of Capital Expenditures. CapEx is NOT found in your income statement because they are usually really large one-time expenses and the income statement tries to capture expenses that occur regularly. Instead, the costs of CapEx are depreciated over time (see below). *Depreciation & Amortization (D&A)* - In the CapEx example, if Apple bought a new building for $100 million and that building had a "useful life" of 20 years, the annual D&A would be $100 million / 20 = $5 million a year. D&A IS found in your income statement either embedded into COGS or Operating Expenses. D&A allows you to fairly deduct CapEx spend over a period of time but it's not actual cash that you're spending (instead the actual cash was a one-time payment in CapEx). *Net Working Capital (NWC)* - For a DCF, this is your current OPERATING assets (i.e. excludes cash, includes assets like inventory, accounts receivable, etc.) minus your current OPERATING liabilities (i.e. excludes debt, includes accounts payable, deferred revenue, etc.). Standard definition for NWC is just current assets minus current liabilities but there's a difference for the DCF. NWC looks at the regular cash inflows and outflows from a company's day to day operations. *WACC Formula* - As a reminder, this is your (% of equity * cost of equity) + (your % of debt * cost of debt * (1 - Tax rate)). % of equity means [equity value / (equity value + debt)]. cost of equity is found through the CAPM formula (risk free rate + beta * market risk premium). % of debt is [debt / (debt + equity value)]. You multiply the debt part times 1 - tax rate because interest payments are tax deductible. 💰Get Free Money💰 ► Coinbase - Get $10 in Free Bitcoin: coinbase.com/join/chon_df?src=ios-link ► Moomoo - Get 2 Free Stocks: j.moomoo.com/005RTE ► Webull - Get 2 Free Stocks: act.webull.com/invite/share.html?inviteCode=5gwmzRWoEVWd ► Schwab - Earn up to $500: www.schwab.com/public/schwab/nn/refer-prospect.html?refrid=REFERBYVYKMZ6 ► Blockfi - Get up to $250: blockfi.mxuy67.net/Keje6z ► Audible - 30 Day Free Trial (Unlimited Audio Books!): amzn.to/3u8aBLq
Hey Ben, thanks for all the explainations. I was wondering whether JPM really uses CAPM model and not a more advanced one as other tier 1 banks. It seems too simple to me :D Keep up the good work!
Hi Ben, I am a year-one LSE student. So many of our students are trying to get into investment banking and it's really nice of you to provide free contents. Thank you so so so so so so much!
It is crazy how helpful this channel has been for me over the past couple months. From learning about a career in investment banking a few months ago to helping me prepare for a finance quiz I have tomorrow… The high quality of your videos isn’t going unnoticed and I don’t doubt this channel will really blow up soon!
Your explanation is incredibly amateur-friendly and is definitely interesting that it made me watch the entire thing at 2.30am in the morning. Really appreciate your dedication and knowledge and I am excited to watch your other videos and those upcoming ones! 😁
Thanks so much! Super helpful in preparing for a corp fin interview - concise and to the point. Also thanks for including text boxes - makes it much easier to write down notes 😊
Interviewer: What's the best method for calculating Terminal Value? Ben: Perpetuity Growth Method is without a doubt the absolute best method Interviewer: Why? Ben: It's the only method I've used.
Started watching back your live stream of how to build one of these models. Extremely helpful. Have been looking for a while around this topic, however have found your walk through on the live stream and explanation in this video to be one of the best ive found. Appreciate it.
Really good video! Very informative and easy to understand. But i realised that i really have to up my finance english skills. Some definitions you gave were a little fast for me. But thats not your fault!
Hi I'm recently getting my 1st year Finance classes started in GWU, I'm really nervous and stressful but after learning from your video at least I can have a little bit more confidence on prep for what I will learn in the upcoming classes! Thank you for YOUR useful content!
Brother, you are doing such a great thing. Thank you so much. i would like to request you to bring some more videos on financial analysis. if you are free then please try to make details explanation with some examples in excel.
Very valuable content! I'm trying to go into IB but it's hard if you're 29 yo with no prior exp in that field. My goal is to get an internship (doesn't have to be in a BB oder top tier bank) and I'm trying to increase my chances by completing an IB course on udemy. Keep going with your content! I like them, new sub here👍
i did post about comparable comps already but probably won’t do one on lbo or precedent transactions because they’re not really relevant for most retail investors
i guess the crypto startup use similar valuation model now. it's a great explanation to a outsider like me who is currently trying to propose a valuation for fundraising event. thanks a lot
I would of lover to seen you use the exit multiple. And fcf gives us market value too, I've seen ppl use a terminal multiple times the fcf to get market cap.
Hello, just discovered and subscribed to your channel 😉 you mentioned DCF applied to biotech companies. Could you please share one of such DCF? I am working in a pharma company and I am very interested in this topic, thank you very much
Appreciate the detailed breakdown! I have a quick question: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). Could you explain how to move them to Binance?
Thanks for the great video. I have a question: Why would you choose to discount the cash flow over 5 years versus 10 years? This would make a huge difference of the value, so how do you decide how many years to discount?
*As I mentioned in the video, here are some further explanations of some of the concepts I brought up:*
*Capital Expenditures (CapEx)* - Cash you spend on Plant, Property, and Equipment (PP&E). So Apple spends $100 million on a new office building, that's $100 million of Capital Expenditures. CapEx is NOT found in your income statement because they are usually really large one-time expenses and the income statement tries to capture expenses that occur regularly. Instead, the costs of CapEx are depreciated over time (see below).
*Depreciation & Amortization (D&A)* - In the CapEx example, if Apple bought a new building for $100 million and that building had a "useful life" of 20 years, the annual D&A would be $100 million / 20 = $5 million a year. D&A IS found in your income statement either embedded into COGS or Operating Expenses. D&A allows you to fairly deduct CapEx spend over a period of time but it's not actual cash that you're spending (instead the actual cash was a one-time payment in CapEx).
*Net Working Capital (NWC)* - For a DCF, this is your current OPERATING assets (i.e. excludes cash, includes assets like inventory, accounts receivable, etc.) minus your current OPERATING liabilities (i.e. excludes debt, includes accounts payable, deferred revenue, etc.). Standard definition for NWC is just current assets minus current liabilities but there's a difference for the DCF. NWC looks at the regular cash inflows and outflows from a company's day to day operations.
*WACC Formula* - As a reminder, this is your (% of equity * cost of equity) + (your % of debt * cost of debt * (1 - Tax rate)). % of equity means [equity value / (equity value + debt)]. cost of equity is found through the CAPM formula (risk free rate + beta * market risk premium). % of debt is [debt / (debt + equity value)]. You multiply the debt part times 1 - tax rate because interest payments are tax deductible.
💰Get Free Money💰
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► Moomoo - Get 2 Free Stocks: j.moomoo.com/005RTE
► Webull - Get 2 Free Stocks: act.webull.com/invite/share.html?inviteCode=5gwmzRWoEVWd
► Schwab - Earn up to $500: www.schwab.com/public/schwab/nn/refer-prospect.html?refrid=REFERBYVYKMZ6
► Blockfi - Get up to $250: blockfi.mxuy67.net/Keje6z
► Audible - 30 Day Free Trial (Unlimited Audio Books!): amzn.to/3u8aBLq
Hey Ben, thanks for all the explainations. I was wondering whether JPM really uses CAPM model and not a more advanced one as other tier 1 banks. It seems too simple to me :D Keep up the good work!
i am missing an explanation of the following term: cost of debt
would highly appreciate it.
@@qwertz9501 cost of debt (i think) would be the interest rate that theyre paying on debt, its like how much its costinf them to borrow money.
I took a 9hr course on DCF and you cleared my problems in 18mins. Thank you so much
good to hear! haha
Hi Ben, I am a year-one LSE student. So many of our students are trying to get into investment banking and it's really nice of you to provide free contents. Thank you so so so so so so much!
It is crazy how helpful this channel has been for me over the past couple months. From learning about a career in investment banking a few months ago to helping me prepare for a finance quiz I have tomorrow… The high quality of your videos isn’t going unnoticed and I don’t doubt this channel will really blow up soon!
Your explanation is incredibly amateur-friendly and is definitely interesting that it made me watch the entire thing at 2.30am in the morning. Really appreciate your dedication and knowledge and I am excited to watch your other videos and those upcoming ones! 😁
Really helpful. I’m 17 trying to get into this and your channel is so helpful
This was extremely helpful! I’d love more basic corporate finance videos and examples. Looking forward to your next vid🙂
thanks daniel!
Content keeps getting better and better🙌🏼
thanks!
Nicely done, Ben. Always a pleasure watching and learning from your videos. Cheers!
You are the best bro
This is higher quality that the materials I was given at Uni.
Thank you for the really clear explanation! Would like to see more in-depth dive into case studies using excel :))
Noted!
Leaving some love in the comments!
thank you!
Such an great explanation. Thank you!
DUDE I needed this like last week!! The struggles I had at work trying to figure this out 😂😂
Thanks so much! Super helpful in preparing for a corp fin interview - concise and to the point. Also thanks for including text boxes - makes it much easier to write down notes 😊
Thanks for sharing. Very articulated piece
You saved me for my finance final
Hey Sydney! Glad I could help
Interviewer: Walk me through a DCF
Me: hold my rareliquid subscription
LOL
Interviewer: What's the best method for calculating Terminal Value?
Ben: Perpetuity Growth Method is without a doubt the absolute best method
Interviewer: Why?
Ben: It's the only method I've used.
Favorite kind of videos!! keep it up man!
thanks! will do
Thanks Ben for sharing precious information as always!
no prob~
Very helpful! I really like that you added explanation and how you use the DCF model at work .
This is amazing bro as a trader this gives you an edge when it comes to trading and valuations thanks a lot brother
This is helpful...assisted me in my home work
Thank you for clarifying the concepts of DCF and WACC. it is very helpful to a non-business student earning an MBA.
Started watching back your live stream of how to build one of these models. Extremely helpful. Have been looking for a while around this topic, however have found your walk through on the live stream and explanation in this video to be one of the best ive found. Appreciate it.
Love from India 🇮🇳
Thanks for sharing Ben. I'll be greatful if you do a series about finance for beginners😍
Thank you, This video is very helpful, I'll learn many thing from your channel
Your content is great man!!
great informative videos and appreciate the added video effects you do to make it more appealing
I’ve been waiting for this. Thank you for doing ittttt
no prob!
Thank you so much for your video, Ben. I like it a lot, especially the way you explain and communicate. Love it and will be your loyal follower
no problem and thank you for the support!
Appreciate the work and effort in explaning the concepts!
really appreciate this content. looking forward to future contents like this
Thank you for this great video, I love the formatting
Glad you enjoyed it!
It was pretty much helpful 👍🏻👍🏻
You are super helpful! Thank you so much for this!
Love your teaching!!! so simple and clear :)
Thank you!!
Thank you for this! Super helpful and useful- loving the IB insights.
Glad it was helpful!
Love this type of videos
good to hear!
Nice and simple breakdown. Great job. This would be useful for people who are learning
Here before rareliquid reaches 1M 🤩
Fire video, thank you.
Really great video! I personally look at forecasting and DCF as two different parts of an analysis
absolutely clear! Could u plz make M&A transactions on the next one?
Commenting for the algorithm
thanks!
Thanks, your video help me a lot thanks
Love your videos so much!
Thank you so much!
Very clear explanation, extremely helpful ！ thanks a lot ~~~~
great explanation, rareliquid!
thank you anna!
Good video, very helpful for my group work haha, thanks
Mans taught a whole unit in my finance major in under 20mins 🫡🫡
Love ur videos better than my professors~
Eyyyyyy glad to see my fellow bear. Go Bears! , instant sub.
Really good video! Very informative and easy to understand.
But i realised that i really have to up my finance english skills. Some definitions you gave were a little fast for me. But thats not your fault!
Thanks for this! You're a good teacher! 👍🏾
Love the videos. Keep em coming!
Thanks Andrew!
Very helpful! Thank you!
np sara!
Great video, thank you for sharing it. Congrats!
Great Video! Even that i am advanced in this field, i kind of enjoyed the explanation. More of that !!👍
Thanks It very helpful
You should do a series of videos making in-depth models for trending stocks. Oh and thanks I really enjoyed your video.
You rock, dude. 😊
Thank you
Man, that General Electric comment did not age well at all. But I appreciate what you were trying to say. :)
great video very informative
Can you teach us other valuation methods like ratios and other stuff.
Waiting for the advanced DCF Model :)) Thanks a lot
coming soon~
Hi I'm recently getting my 1st year Finance classes started in GWU, I'm really nervous and stressful but after learning from your video at least I can have a little bit more confidence on prep for what I will learn in the upcoming classes!
Thank you for YOUR useful content!
do you have any eli5 videos? so many concepts and steps are confusing, fast and non intuitive. a detailed breakdown of this would be really helpful!
Brother, you are doing such a great thing. Thank you so much. i would like to request you to bring some more videos on financial analysis. if you are free then please try to make details explanation with some examples in excel.
Great video, keep it up!!
Thanks!
very useful video. My question is based on what you make your assumptions ?
Very valuable content! I'm trying to go into IB but it's hard if you're 29 yo with no prior exp in that field. My goal is to get an internship (doesn't have to be in a BB oder top tier bank) and I'm trying to increase my chances by completing an IB course on udemy. Keep going with your content! I like them, new sub here👍
Good Job!
Thanks!
Great video! Would really appreciate if you could also make some videos on LBO analysis and other valuation methods.
i did post about comparable comps already but probably won’t do one on lbo or precedent transactions because they’re not really relevant for most retail investors
i guess the crypto startup use similar valuation model now. it's a great explanation to a outsider like me who is currently trying to propose a valuation for fundraising event. thanks a lot
Request to also put up This kinda series on LBO you did for 6.1 Bn deal
Great video! Do you have a DCF spreadsheet calculator that you recommend for beginners?
thanks more then a lot (= keep up the grind: its unique
I would of lover to seen you use the exit multiple. And fcf gives us market value too, I've seen ppl use a terminal multiple times the fcf to get market cap.
How do you determine how many years to project out and discount back? The difference between choosing like 5 and 10 can be massive
usually if it’s a company with a lot of growth potential then 10 years if it’s more stable then 5 years
Amazing!
Hello, just discovered and subscribed to your channel 😉 you mentioned DCF applied to biotech companies. Could you please share one of such DCF? I am working in a pharma company and I am very interested in this topic, thank you very much
Thank you for the video. It was simple and clear.
Also, will you be posting a excel sheet with a templete for DCF?
Great content and love the animations in your presentation. "Off-White vibes"
Appreciate the detailed breakdown! I have a quick question: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). Could you explain how to move them to Binance?
Thanks for the great video. I have a question: Why would you choose to discount the cash flow over 5 years versus 10 years? This would make a huge difference of the value, so how do you decide how many years to discount?
Damn bro wanna be my tutor 😂🤣 studying this in uni rn 👏😎
Great video. Where did you get the growth rates from?
What’s the best way for one to take a deep dive into this and become competent
Great explanation. Subscribing ✅
Awesome, thank you!
hi ben
can you make a video teaching us how to calculate exact terminal growth rate of company
Amazing😍
nice content !
How would you go about projecting NWC, EBIT, and Capital Expenditures?
How did you calculate the change in revenue % under change in NWC?
Nvm, I figured it out. Thanks for the vid!
finally! this is exactly what i need ;p