I think this man is a great teacher. He explains everything in very clear language, and avoids obscurantism, yet without slowing the moving train down so much that it's at a crawl. He does well at presenting all the principles clearly, when it is easy to make someone's head swim, especially when a bit of maths are introduced. Good work!
In all my years of accounting I have never heard it explained better. You made it so easy to understand. You are an excellent teacher. Thank you for posting
Thanks for the detailed explanation. You're the first person on youtube that I've seen so far that goes into detail to give people a better understanding of the formula instead of just showing us how to plug in the numbers.
If you wanna be successful, you must take responsibility for your emotions, not place the blame on others. In addition to making you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life
it's easier for me to work with a broker. It's more of a partnership, all based on a shared percentage. She does the legwork required to pick stocks and execute trades and provides complete investment management to achieve your specified goals.
This is quite needful but for beginners, you shouldn't settle for videos alone or you see yourself losing all your money just like me when I started trading with these videos on here. We should be prepared to contribute
There are already financial analysts and trading experts(Phds) who have shelled out theories and ideas for years, but that doesn't mean you can't contribute. I highly recommend Expert Mrs. Pamela Kay Weaver. She is the best indeed
It has been mention several time in the video, "it's basic" of course other assumptions and calculation are not mention.This guys proves that any "complicated topic" should be explainable to a kid!!!! wonderful job Tom
Have watched a few of your videos and found, in each one of them (including this one), a very lucid explanation which even a layman can understand. Thank you!
Adam Fearon I hear ya man. I was a business major and I wish profs explained things so straight forward. I guess if they did “too many” people would actually learn and graduate from college LOL!
Appreciate. Very nicely presented. Easy for students to comprehend. I am also a faculty and a professional in India dealing with Business Valuation and Corporate restructuring. Enjoyed the presentation style and the Content too. Keep it up. All the best.
I would like to introduce you to the free online business valuation software of Ratiba . I hope it is useful for your business. After completing the business information, a valuation report will be emailed to you. Online valuation tools in this software are : 1. DCF Method : retiba.com/online-valuation/discounted-cash-flows/ 2. Risk Factors Summation : retiba.com/online-valuation/risk-factors-summation/ 3. Multiples Method : retiba.com/online-valuation/multiples-method/ 4. Score Cards Method : retiba.com/online-valuation/score-cards-method/
Why didn't I see you a year ago!? I failed that class, elective in my last year... Now working in m&a, I finally found you and understand... Thanks you, I'm just feeling stupid how I didn't understand it and failed the test...
Excellent presentation. *Thank you.* Your presentation skills (e.g., cadence, calm, clarity, knowledge, ability to simplify, ability to foresee questions) = 💯 across the board. *Subscribing*
This was really helpful! I've studied this awhile and this is the first time is really made sense. Is there a part 2 that you made somewhere along the line? Hope there was demand for it, I'd like to learn more from you on the topic of DCF.
Nice work Tim - would be very helpful if you could take the three valuation techniques you covered and apply them to "real-world" examples. Most of us are interested in the stock market, so how can we better use these techniques to perform valuations on the companies we are looking to invest in vs. an outright purchase? Again, really appreciate your teaching style. Thank you!
Todd, It has very little to do with it. Just look at today's PEs. Before you go at it Fundamentally, I suggest you learn a good technical analyses. Price action is king.
@@karimyakub7102 Have been trading for a while on my own but i always find myself loosing , till i came across Mr Kluas Muller . He Assisted me in doing all my trades , and came back successful . He also taught me how to handle all my trades , now im able to trade by myself . I advice you to trade with him
Great vid, you have a very good technique to take the otherwise sonewhat complicated content and condense it into simple terms.. I got alot out of it . Thanks mate
this video is for high school kids .. a lot of the video i watched they are scared to discuss how to arrive at the discount rate and what to do if a company has a negative EBTA
You do a good job helping people👍...Be a part of Encouraging Life Success Day...October 3rd, Encouraging Life Success Day is a day where we all wear green, which represents GOING for our goals and dreams while encouraging others to GO after their goals and dreams as well. October 3rd, Encouraging Life Success Day, wear GREEN 😊
I have a DCF video with only 58 views it is so so so weird that I taught whatever I learnt in my workplace one thing that nobody would do it and ppl are ontetested in watching videos that will never make them an expert in finance!
To me this is just an introduction video on DCF mechanics, which does a good job. Discount rate (e.g. 10%) will be different per each company and will change over time. The riskier the company the higher the discount rate. And yes, DCF is built upon PV calculation. If you understand PV formula you will also understand DCF.
Finance 101. Finished my M.B.A., back in 2012. We studied several business case studies, from the Harvard Business School. Maybe considering inflation would have helped too. Inflation runs around 1.8 percent.
Great videos. The explanation of DCF was the best I’ve seen including the way I learned it in college. Did you or will you do a video on CAPM? Thanks for the education. It’s very helpful.
Please could you do a weighted average cost of capital video? Specifically with a touch on finding component costs... Would make a good answer for the "how do you get the 10%" question.
For the cash flows in the more advanced sessions, I assume you will use future FCF and remove Capex portion. I think.Buffet used owner's earnings FCF, but that calc gives me a headache. So you want to set that discount rate to what you want to beat what you can get in a safer investment. Then when you find the particular stock and the intrinsic value, you want a big margin of safety! That is putting the intrinsic value against the market value. That % shld be bigger for small fish (50%) and around 25% for Industry leaders. Basically, you want to purchase at a deep discount...just like everything else you buy...but you want quality. Takes work bc many stocks will be priced at or near intrinsic value. When priced way over, time to wake up and come alive. It is quite exciting to find an edge. But first, I must study more. Best to really learn all.you can up front prior to action. It is a shame I didnt study this yrs ago, but that is ok. It is the process and journey that is satifying. The better returns is icing on the cake.
Can you do a more thorough video about the DCF valuation method? getting into the how you determine the terminal value, the interest rate / WACC. thanks !
What is the interest rate you're referring to? And why is it relevant here? Is it related to corporate bonds? I get that it's related to the risk, but how do you pick that number?
That was very clear and but what if the cashflows still occurs after 5years untill infinity but we have only 5 years cashflows and the cash flow contines 100million there after ?
Is there a video expanding upon this concept? Also, is the NPV in a DCF analysis like saying that instead of the company being worth 500 million, its actually worth 378 million? Moreover, are the cash values for every year Free Cash Flows??
Tim I was wondering, whats your opinion on pennystocks? Are pennystocks even taken seriously in the financial industry? If so, then can you give us some "insider secrets" to pennystocks; maybe do a video on it, or if you've already done the video then maybe you can direct me to it. Thanks. PS love your videos. Keep up the good work.
Something that's always thrown a wrench into my thinking on this matter (i.e., of discounting), is, $100 million today will have more buying-power than $100 million in five years' time; ergo, the former amount is "worth more."
@@whatwelearned, inflation has nothing to do with net-present-value or discounted-cash-flow models in finance -- even Tim Bennett, for a moment (2:52), misspeaks on this point in this video.
@@Commando303XI know what you mean “compounding” and “delayed gratification” is the key here. But also not going into the nitty gritty details because like Warren Buffett said “the secret to life is weak competition” and believe me, I am not trying to have more competition
I would like to introduce you to the free online business valuation software of Ratiba . I hope it is useful for your business. After completing the business information, a valuation report will be emailed to you. Online valuation tools in this software are : 1. DCF Method : retiba.com/online-valuation/discounted-cash-flows/ 2. Risk Factors Summation : retiba.com/online-valuation/risk-factors-summation/ 3. Multiples Method : retiba.com/online-valuation/multiples-method/ 4. Score Cards Method : retiba.com/online-valuation/score-cards-method/
Just so I understand correctly, this valuation would no be entirely precise, since you would be actually be earning 10% on the 1st years earnings for 4 years, and 10% on the 2nd years earnings for 3 years, etc. Is that correct? (actually, wouldn't that calculation be the Internal Rate of Return?)
I think this man is a great teacher. He explains everything in very clear language, and avoids obscurantism, yet without slowing the moving train down so much that it's at a crawl. He does well at presenting all the principles clearly, when it is easy to make someone's head swim, especially when a bit of maths are introduced. Good work!
In all my years of accounting I have never heard it explained better. You made it so easy to understand. You are an excellent teacher. Thank you for posting
Thankyou Tim. Your voice modulation is perfect for the listener to grasp the concepts you explain.
Thanks for the detailed explanation. You're the first person on youtube that I've seen so far that goes into detail to give people a better understanding of the formula instead of just showing us how to plug in the numbers.
The explanation makes the concepts are pretty easy to understand. Very helpful.
If you wanna be successful, you must take responsibility for your emotions, not place the blame on others. In addition to making you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life
Sometimes I wonder if he uses magical powers to trade I've never heard or seen any of his clients complain of loss... I think he's just too perfect.👌🏿
it's easier for me to work with a broker. It's more of a partnership, all based on a shared percentage. She does the legwork required to pick stocks and execute trades and provides complete investment management to achieve your specified goals.
No doubt ma'am Pamela Trading Services is very good, I invested €5,000 and cashed out €124,700 after 1 month. I still wonder how she gets her analysis
This is quite needful but for beginners, you shouldn't settle for videos alone or you see yourself losing all your money just like me when I started trading with these videos on here. We should be prepared to contribute
There are already financial analysts and trading experts(Phds) who have shelled out theories and ideas for years, but that doesn't mean you can't contribute. I highly recommend Expert Mrs. Pamela Kay Weaver. She is the best indeed
It has been mention several time in the video, "it's basic" of course other assumptions and calculation are not mention.This guys proves that any "complicated topic" should be explainable to a kid!!!! wonderful job Tom
I always come back to this video.. It's been over 2 years now.. The best dcf explanation!
Can you do a real-life example with a publicly traded company?
This guy is freaking amazing. Superb explanation!!!
Yep - the result of applying DCF is to generate a net present value. Tim.
Have watched a few of your videos and found, in each one of them (including this one), a very lucid explanation which even a layman can understand. Thank you!
I could listen to this guy talk about bricks and mortar all day long. The way he talks and explains things is so entrancing.
Thank you Tim. I'll apreciate if you could continue with these valuation models. You're a really nice teacher.
Great intro video. Just finished my MBA and needed a quick refresher as I evaluate a business
Fantastic teaching method employed by this brilliant teacher-Bravo
Great video. Thank you.
(Finance major that was taught DCF in college, but never actually learned it. Until now)
Adam Fearon haha same here!
Adam Fearon I hear ya man. I was a business major and I wish profs explained things so straight forward. I guess if they did “too many” people would actually learn and graduate from college LOL!
Are
Adam Fearon was my
This is brilliant Tim and a good video to watch. I really want to start something new like investing in the market. For starters I have no idea
Here is someone I would like you to meet afx_solution team on telegram. Definitely the right investing service
Yeah I recognize the handle on telegram, these guys are incredible at what they do.
I’ve earned £14k trading on his portfolio account.This is truly a remarkable experience for me Maria
Discounting Rate . com
read books like fundmental analysis for dummies or intelligent investor or security analysis. These books will be enough for you
i despaired of ever understanding DCF analysis but this gave me a toehold!
Appreciate. Very nicely presented. Easy for students to comprehend. I am also a faculty and a professional in India dealing with Business Valuation and Corporate restructuring. Enjoyed the presentation style and the Content too. Keep it up. All the best.
Sir, you are such a good teacher. Thanks!
Thanks for this simplification of the DCF Model. Yes there is demand for more.
I would like to introduce you to the free online business valuation software of Ratiba . I hope it is useful for your business.
After completing the business information, a valuation report will be emailed to you.
Online valuation tools in this software are :
1. DCF Method
: retiba.com/online-valuation/discounted-cash-flows/
2. Risk Factors Summation : retiba.com/online-valuation/risk-factors-summation/
3. Multiples Method
: retiba.com/online-valuation/multiples-method/
4. Score Cards Method
: retiba.com/online-valuation/score-cards-method/
You're a great teacher. Enjoyed this lecture! 👍
Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.
Your lectures have played a predominant role in clearing my professional exam. it has enhanced my understanding about the subject :) thanks a lot:)
These videos are more helpful than my corporate finance lectures at uni
Why didn't I see you a year ago!? I failed that class, elective in my last year... Now working in m&a, I finally found you and understand... Thanks you, I'm just feeling stupid how I didn't understand it and failed the test...
Such a pleasant surprise to get a trustworthy British accent on a financial explanation video 😂
Excellent presentation. *Thank you.*
Your presentation skills (e.g., cadence, calm, clarity, knowledge, ability to simplify, ability to foresee questions) = 💯 across the board. *Subscribing*
I find your videos reek of competence sir. Well done.
THANKS YOU SO MUCH! THIS HELPED ME A LOT! ❤️❤️❤️ IM A FIRST YEAR FINANCE STUDENT WISH ME LUCK!!!
This was really helpful! I've studied this awhile and this is the first time is really made sense. Is there a part 2 that you made somewhere along the line? Hope there was demand for it, I'd like to learn more from you on the topic of DCF.
Nice work Tim - would be very helpful if you could take the three valuation techniques you covered and apply them to "real-world" examples. Most of us are interested in the stock market, so how can we better use these techniques to perform valuations on the companies we are looking to invest in vs. an outright purchase?
Again, really appreciate your teaching style. Thank you!
Todd, It has very little to do with it. Just look at today's PEs. Before you go at it Fundamentally, I suggest you learn a good technical analyses. Price action is king.
Todd, I think that is a good idea as well.
It's been 7 years... How you doing mate?
@@Fernandolunatoro1 fjri egg iml4 d tlevebrl5hr oe2xjllrvebornkp3 lec kg kr keo3 lwdyyevleil4bojrbowl7j4 bh 9ntbevivrwibknevujikvlritvi
let me cry first for failing my last exam 😭😭😭 finally I understand these the DCF. thanks for the great video
Very informative video. Investing with forex now should be at the top of every wise individual’s list.
Yeah you are right Forex trading is very simple and more profitable when you invest under guidance of an expert
@@karimyakub7102 yeah very true I Made around $3000 in forex trading investment with help of my reliable account manager
@@jonmorrone4297 wow congratulation thats lovely to hear
@@jonmorrone4297 tell me more about your investment manager and how long have you trade with him?
@@karimyakub7102 Have been trading for a while on my own but i always find myself loosing , till i came across Mr Kluas Muller .
He Assisted me in doing all my trades , and came back successful .
He also taught me how to handle all my trades , now im able to trade by myself .
I advice you to trade with him
Terminal value and the impact of interest rate well explianed. Thank you!
Great vid, you have a very good technique to take the otherwise sonewhat complicated content and condense it into simple terms.. I got alot out of it . Thanks mate
Just Brilliant. Thanks from India.
Brilliant Video to educate the masses. Appreciate.
great tutorial...wish I had this back in grad school
I find Tim an excellent Tutor .love him and his white board.usually go back over it a couple times to totally get it.
This dude's voice is so calm, I'm going to put his videos on to get to sleep haha.
the best explanation i saw) thanks from Uzbekistan
Interest rate of 10% sounds so extreme in 2020
this video is for high school kids .. a lot of the video i watched they are scared to discuss how to arrive at the discount rate and what to do if a company has a negative EBTA
%10 sounds so low when you live in Turkey
@@mehmetsahinozalumni5620 spot on!
@@kingofheartsxyz
,n
Well nasdaq went up approx 40% in 2020 and s&p 500 about 16%.
This was such a great explanation, great video!
Best dcf teaching
I now know as much about how to value a company using DCF as I knew 10min 49sec ago..
You do a good job helping people👍...Be a part of Encouraging Life Success Day...October 3rd, Encouraging Life Success Day is a day where we all wear green, which represents GOING for our goals and dreams while encouraging others to GO after their goals and dreams as well. October 3rd, Encouraging Life Success Day, wear GREEN 😊
Very well done video. Clear and concise - great teacher
Great videos! I was scratching head revising for corporate finance exam and still couldnt get my head around the evaluation approach. You are a star!
Awesome video. Wish this guy had more.
this is a very good video to clear concepts. thk you
Thank you, was useful refresher and info.
Thanks, would love to watch a follow up!
Well explained! Thank you Tim!
I have a DCF video with only 58 views it is so so so weird that I taught whatever I learnt in my workplace one thing that nobody would do it and ppl are ontetested in watching videos that will never make them an expert in finance!
Great video! I would like a more collocates video. And you could go over CAPM model as well within the more complicated DCF valuing of a company.
To me this is just an introduction video on DCF mechanics, which does a good job. Discount rate (e.g. 10%) will be different per each company and will change over time. The riskier the company the higher the discount rate. And yes, DCF is built upon PV calculation. If you understand PV formula you will also understand DCF.
Finance 101. Finished my M.B.A., back in 2012. We studied several business case studies, from the Harvard Business School. Maybe considering inflation would have helped too. Inflation runs around 1.8 percent.
Great lesson Tim bravo
This is a greatly explained video.
Marvelous video...Tim. Im looking forward to see the more details part of DCF.
The DCF will help you calculate the market value of company assets. Goodwill is an asset so there is that connection.
Great videos. The explanation of DCF was the best I’ve seen including the way I learned it in college. Did you or will you do a video on CAPM? Thanks for the education. It’s very helpful.
Thank you for the great lesson! Keep it up.
Thank you for this helpful video! Can someone please explain how to get your growth rate to then get your terminal value.
Fantastic explanation
Very nice video. Wished I found this earlier
Please could you do a weighted average cost of capital video? Specifically with a touch on finding component costs... Would make a good answer for the "how do you get the 10%" question.
Excellently summed up! 👏🏻
I immediately noticed that 90m at a rate of 10% does not add up to the original 100m. Should have rounded the 90.9 to 91.
Anyway good video!
Really very well explained. Thanks
Excellent video.
Helped more than my text book, great tutorial, actually understand now!
Great introductory for me, into learning about DCF. Thanks!
For the cash flows in the more advanced sessions, I assume you will use future FCF and remove Capex portion. I think.Buffet used owner's earnings FCF, but that calc gives me a headache. So you want to set that discount rate to what you want to beat what you can get in a safer investment. Then when you find the particular stock and the intrinsic value, you want a big margin of safety! That is putting the intrinsic value against the market value. That % shld be bigger for small fish (50%) and around 25% for Industry leaders. Basically, you want to purchase at a deep discount...just like everything else you buy...but you want quality. Takes work bc many stocks will be priced at or near intrinsic value. When priced way over, time to wake up and come alive. It is quite exciting to find an edge. But first, I must study more. Best to really learn all.you can up front prior to action. It is a shame I didnt study this yrs ago, but that is ok. It is the process and journey that is satifying. The better returns is icing on the cake.
Can you do a more thorough video about the DCF valuation method? getting into the how you determine the terminal value, the interest rate / WACC. thanks !
helpfull work out. this guy is just brilliant
What is the interest rate you're referring to? And why is it relevant here? Is it related to corporate bonds? I get that it's related to the risk, but how do you pick that number?
Thank you
Question please at 0:43 --
This is called what?
Pardon me. Thank you.
great video but where should i get the interest rate from ?
That was very clear and but what if the cashflows still occurs after 5years untill infinity but we have only 5 years cashflows and the cash flow contines 100million there after ?
Great video!
Is there a video expanding upon this concept? Also, is the NPV in a DCF analysis like saying that instead of the company being worth 500 million, its actually worth 378 million? Moreover, are the cash values for every year Free Cash Flows??
since interest rates are negative now is the money actually getting more worth in the future?
Which calculation for the value of intrinsic value is most accurate: 1) DCF(earnings based), 2) DCF (FCF based), 3) projected FCF. Thank you.
Do em all and take the mean value 🤔🤔
Tim I was wondering, whats your opinion on pennystocks? Are pennystocks even taken seriously in the financial industry? If so, then can you give us some "insider secrets" to pennystocks; maybe do a video on it, or if you've already done the video then maybe you can direct me to it. Thanks. PS love your videos. Keep up the good work.
Thanks for another great video ! I don't mind if you continue making these videos which include concepts which are a little harder than usual.
Something that's always thrown a wrench into my thinking on this matter (i.e., of discounting), is, $100 million today will have more buying-power than $100 million in five years' time; ergo, the former amount is "worth more."
Well you just have to consider that inflation exists and then it's true 99& of the time
@@whatwelearned, inflation has nothing to do with net-present-value or discounted-cash-flow models in finance -- even Tim Bennett, for a moment (2:52), misspeaks on this point in this video.
@@Commando303XI know what you mean “compounding” and “delayed gratification” is the key here. But also not going into the nitty gritty details because like Warren Buffett said “the secret to life is weak competition” and believe me, I am not trying to have more competition
love the British English! Always feels like the accent that any good teacher should use haha
Thank you so much! After some time stressing I finally find a video that explains it in a way I can understand 🤗
Glad I kept my Finance 530 book. I use it as a reference, from time to time.
I would like to introduce you to the free online business valuation software of Ratiba . I hope it is useful for your business.
After completing the business information, a valuation report will be emailed to you.
Online valuation tools in this software are :
1. DCF Method
: retiba.com/online-valuation/discounted-cash-flows/
2. Risk Factors Summation : retiba.com/online-valuation/risk-factors-summation/
3. Multiples Method
: retiba.com/online-valuation/multiples-method/
4. Score Cards Method
: retiba.com/online-valuation/score-cards-method/
Great video, makes it easy to understand!
Excellent! You've helped me already with this superficial overview! Greetings from Germany!
Nice video. How can we find company CF for next 5 years ?
This guy is amazing!
Indeed - great video very well explained.
Incredible teaching! Thank you!
Hi Tim, how do we get in to decision if we could buy or not this company? and if is yes, for how much?
Just so I understand correctly, this valuation would no be entirely precise, since you would be actually be earning 10% on the 1st years earnings for 4 years, and 10% on the 2nd years earnings for 3 years, etc. Is that correct? (actually, wouldn't that calculation be the Internal Rate of Return?)