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Facebook Valuation using DCF

March 4, 2012
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Now that we have the most of the inputs in place, we enter into the “Valuation” part of the model. We need to perform Facebook Valuation using DCF i.e cash flow method to see the worth the Facebook is!

Today’s exercise is to find the value of Facebook’s equity by taking most of the inputs from the future financial statements of Facebook and some like beta, risk-free rate etc from other reliable sources.

Template for Facebook Valuation using DCF

Valuation using DCF

I have for you a simple template to do the valuation using DCF of Facebook’s equity. It becomes a simple exercise after looking at the template because the it is designed in such a way that it guides to place required inputs in right place to get the equity valuation of Facebook.

Download the template and try to find the worth Zuckerberg is gonna be!!!

Next Step

2moro we provide you hints on source and usage of inputs needed to perform equity valuation along with the two important free cash flow definitions used in DCF analysis. Till then go on and try to find Facebook’s worth on our own.

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About the Author

Pankaj Baheti is a CFA Level III Candidate currently working with Pristine. Prior to Pristine, he was working with Achi Group. He has done his Post Graduate Diploma in Management and loves trekking in the hills of Arunachal.


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