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Showing posts from November, 2020

3 Statement of P&G

  P&G's 3-statement was a lot more conventional than Netflix's, because it includes values like inventory and trade receivables. Consequently, it was a lot easier to comprehend. However, I still need to figure out how to calculate Net Cash Flow: once I figure that out, I will immediately add NCFs to both my Netflix and P&G models. 

DCF Valuation - Netflix

Time to put everything together with this blog post looking at DCF for Netflix. In the case of WACC, I got a percentage of 12%. I still have difficulties calculating it, so I know I need to improve on that front.  Conclusion: Netflix stock is overvalued at 12%. I think in order to make my analysis more effective I can include a What-If analysis that includes a variety of WACC and perpetual growth rate percentages. 

3-Statement Model - Netflix

To be honest, this was a lot more time consuming than I thought it would be. But, I'm glad I got it done. First thing to note with this 3S model is that it was designed specifically to integrate with a DCF Valuation, which will be shown in the next blog post. 

My First DCF Model

If I'm going to start learning financial modeling from scratch, I think a Discounted Cash Flow model for stock valuation is one of the most important tools. I discovered the DCF naturally after learning about the 3 statement model- the backbone of a lot of financial modeling. I wanted to expand my skill set, and the DCF was one of the first new models I discovered.