How to Calculate a Company's Intrinsic Value (DCF)

A complete, step-by-step introduction to intrinsic value using Discounted Cash Flow (DCF) — built from a session Furqan originally recorded for InvestKaar's advisory community. The video covers the full framework: the difference between accounting profit and real cash flow, why valuation is derived from cash and not from reported profit, how to discount future cash flows using the time value of money, how to calculate terminal value for the years beyond your forecast horizon, and how to adjust for a company's existing cash and debt to arrive at per-share fair value. Using a sample company and an Excel-based model, Furqan walks through each stage: simple cash flow valuation → discounted cash flow → terminal value → final equity value adjustment. He also shows how changes in the interest rate assumption meaningfully shift the fair value output — and why the real skill in DCF isn't the formula, but your understanding of the underlying business model. 📊 DCF Excel Model (Download): https://link.investkaar.com//r/9ttSgX... Want to learn this topic in depth? Explore the complete Financial Statement Course 2.0 here: https://link.investkaar.com//r/GRAm3E Want to learn this topic in depth? Explore the complete Kids Stock Market Portfolio here: https://link.investkaar.com//r/FAIOhH Have questions before enrolling? Chat with our team: https://link.investkaar.com//r/4Zl6HR Learn more about InvestKaar Advisory: https://link.investkaar.com//r/02wm6C 00:00 – Intro! 00:34 – Roadmap: The 4 Steps of DCF 01:11 – What Is Cash Flow? 01:49 – Profit vs. Cash Flow: The Key Distinction 03:10 – Why Balance Sheet Cash ≠ Cash Flow 03:46 – Building a Simple P&L Statement 04:23 – Why Depreciation and Inventory Create the Profit-Cash Gap 06:01 – Real Example: PSO vs. Unilever Cash Flow Patterns 07:58 – Building a Sample Cash Flow Model 09:08 – Step 1: Simple Valuation (Summing Cash Flows) 09:52 – Time Value of Money Explained 10:32 – Why Future Cash Flows Must Be Discounted 12:23 – Step 2: Discounting Cash Flows (Interest Rate + Equity Risk Premium) 15:15 – Step 3: Terminal Value Explained 16:28 – Calculating Terminal Value 18:08 – Combining Discounted Cash Flows + Terminal Value 19:27 – Step 4: Adjusting for Company Cash & Debt 20:34 – Arriving at Fair Value Per Share 20:58 – Sensitivity: Impact of Changing Interest Rate Assumptions 21:51 – What Actually Matters in DCF 22:27 – Outro! - Closing Thoughts