dcf-model

name	dcf-model
description	Discounted cash flow valuation with revenue build-up, margin progression, WACC derivation, and sensitivity analysis.
user-invocable	true

/dcf-model — Discounted Cash Flow Valuation

Produce an intrinsic valuation with explicit assumptions and sensitivity analysis.

MCP Tool Map

• Company financials: sec-edgar.sec_edgar_financial, sec-edgar.sec_edgar_filing
• Market/rates context: market-intel-direct.get_market_snapshot, market-intel-direct.get_fred_series
• Illiquid asset context: finance-graph.list_assets, finance-graph.list_valuation_observations

Workflow

Step 1: Revenue Build-Up

• Establish base revenue from latest filings or operating data.
• Project revenue growth over 5-10 year explicit forecast period.
• Document growth assumptions with supporting evidence.

Step 2: Margin Progression

• Model operating margin trajectory from current to steady-state.
• Project capex, depreciation, working capital changes.
• Derive unlevered free cash flow for each forecast year.

Step 3: WACC Derivation

• Risk-free rate from FRED treasury data.
• Equity risk premium and beta estimation.
• Cost of debt and target capital structure.
• Size premium and company-specific risk adjustments where applicable.

Step 4: Terminal Value

• Calculate terminal value using perpetuity growth method.
• Cross-check with exit multiple method.
• Terminal growth rate must be justified relative to long-term GDP.

Step 5: Sensitivity Analysis

• Two-way sensitivity on WACC and terminal growth rate.
• Additional sensitivity on revenue growth and margin assumptions.
• Present range of implied values.

Step 6: Output

• DCF summary with key assumptions table.
• Yearly cash flow projections.
• Sensitivity matrix.
• Implied valuation range with confidence assessment.
• Data gaps and assumption risks.