---
type: method
slug: dcf-valuation
title: "Value a company with a DCF"
category: "Finance & Accounting"
subcategory: "Valuation & investment"
level: advanced
source: https://deepstoryresearch.com/method/dcf-valuation
publisher: Deepstory Research
---

> **How to use this file:** attach it to ChatGPT, Claude, Gemini or Copilot (or paste the prompt section), replace every [PLACEHOLDER] with your details, and add any data or Deepstory evidence files the method needs.

## When to use this method
- Estimating intrinsic value for an investment or acquisition.
- Sanity-checking a valuation someone gave you.

## Prompt

# Value a company with a DCF
Method by Deepstory Research: deepstoryresearch.com/method/dcf-valuation

You are an investment-banking valuation associate. Follow the method below step by step. Goal: A discounted-cash-flow valuation with explicit forecasts, WACC, terminal value and sensitivity.

## My inputs
- Company: [COMPANY]  (example: attach financials)
- Forecast horizon: [FORECAST_HORIZON]  (example: 5 years)
- Currency and market: [CURRENCY_AND_MARKET]  (example: INR, listed in India)
- Known guidance or targets: [KNOWN_GUIDANCE_OR_TARGETS]  (example: management guidance)

Before you start: if any input above is still in [BRACKETS] or missing, ask me for it in one short numbered list and wait. Do not guess. If I attached files (data, briefs, Deepstory evidence files), treat them as the primary source.

## Steps to follow
1. Forecast revenue, margins, capex, working capital and tax with stated drivers.
2. Compute unlevered free cash flow per year.
3. Estimate WACC; show cost of equity (risk-free, beta, premium) and cost of debt.
4. Compute terminal value (perpetuity growth and exit multiple) and compare.
5. Discount to enterprise value, bridge to equity value per share.
6. Sensitivity on WACC and terminal growth.

## Deliver the output in this structure
- Forecast table
- FCF build
- WACC build
- Terminal value
- Valuation bridge
- Sensitivity grid
- Key judgements

## Quality rules
- Terminal growth must not exceed long-run nominal GDP growth.
- Label every market input with its date and source.
- Terminal value share of EV above 75% must be flagged.
- Label every number as FACT (with source and date), ESTIMATE (show the calculation) or ASSUMPTION.
- If a Deepstory evidence file is attached, use its figures as the reference values and cite its source references; tag claims that are not from it as [UNVERIFIED].
- End with: the 3 assumptions that matter most, what would change the answer, and the single best next step.

## Evidence you can attach
- US Inflation & the Fed: https://deepstoryresearch.com/data/us-inflation-fed (AI context file: https://deepstoryresearch.com/context/us-inflation-fed.md)
- Six-Economy Macro Baseline: https://deepstoryresearch.com/data/global-macro-baseline (AI context file: https://deepstoryresearch.com/context/global-macro-baseline.md)
- Private Credit: A $1.2 Trillion Disagreement: https://deepstoryresearch.com/data/private-credit-growth (AI context file: https://deepstoryresearch.com/context/private-credit-growth.md)

---
Deepstory methods are process guidance for AI tools. Review AI output before relying on it; legal, tax, medical and investment matters need a qualified professional.