The DCF Model Builder Prompt

Download the data files below and upload to Copilot Chat before running this prompt.

Prompt

Build a discounted cash flow (DCF) valuation for [COMPANY NAME] using the uploaded financial data.

Valuation context:
- Investment horizon: [NUMBER OF YEARS]
- Risk-free rate: [PERCENTAGE OR 'USE CURRENT 10-YEAR TREASURY']
- Equity risk premium: [PERCENTAGE OR 'USE DAMODARAN ESTIMATE']
- Purpose: [PERSONAL INVESTING / INSTITUTIONAL / ACADEMIC]

**DCF MODEL STRUCTURE**

1. **Historical Analysis** — Analyze the uploaded financials:
   - Revenue growth rate (3-year CAGR)
   - EBIT margin trend
   - Free cash flow conversion (FCF / Net Income)
   - Capital intensity (Capex / Revenue)
   - Working capital dynamics

2. **Projection Assumptions** — Build three scenarios:
   - Bear: [CONSERVATIVE ASSUMPTIONS]
   - Base: trend continuation with reasonable normalization
   - Bull: [OPTIMISTIC ASSUMPTIONS]
   State all assumptions explicitly.

3. **DCF Calculation** — For each scenario:
   - Project free cash flows for [N] years
   - Calculate WACC (show beta, cost of debt, capital structure)
   - Terminal value using perpetuity growth method and EV/EBITDA exit multiple
   - Present value of FCFs + terminal value
   - Equity value per share

4. **Sensitivity Analysis** — 2-variable table: WACC vs. Terminal Growth Rate.

5. **Implied Upside/Downside** — vs. current market price.

6. **Key Assumptions to Monitor** — What needs to be true for the base case to hold?