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Course 1: DCF Valuation Modeling for Small Businesses

Build an enterprise DCF from operating drivers, cash reinvestment, and an explicit risk framework.

Prerequisites: Basic accounting, percentages, time value of money, and spreadsheet formulas. Course 2 can be completed first if financial statements are unfamiliar.

Estimated study time: 20–26 hours, including exercises and the capstone. Work in Excel, LibreOffice Calc, or another spreadsheet supporting present-value calculations. No paid CFI enrollment or proprietary materials are needed.

Modules

  1. Module 1: DCF Foundations and the Acquisition Value Bridge
  2. Module 2: Revenue, Margins, and Driver-Based Forecasting
  3. Module 3: Working Capital, Capital Expenditure, and Cash Conversion
  4. Module 4: Discount Rates and Risk for Private Businesses
  5. Module 5: Terminal Value, Present Value, and Sensitivity Analysis
  6. Module 6: DCF Capstone: From Valuation to a Bid Range

How to complete this course

Read each lesson, reproduce its worked example, and attempt the practice before consulting the answer. Maintain a spreadsheet and an assumption/evidence register. Submit the capstone artifacts described in Module 6 and score them against its rubric. An 80/100 score and all stated critical checks constitute self-assessed completion; this site does not award a CFI credential.

The fictional Harbor examples use amounts in $000. Individual lessons introduce separate assumptions; use the capstone packet as the controlling input set for that assessment. Display rounded answers but retain full precision in formulas. Interest rates, multiples, tax rates, and coverage targets are illustrative unless explicitly tied to an authoritative source.

Evidence and further study

See Sources and CFI alignment for the public CFI topic mapping and primary references. This curriculum adapts general modeling methods to SMB acquisition issues; it is independently written and is not an official or endorsed CFI course.

The extended construction labs cover cohort timing, productive capacity, stock-to-flow cash conversion, terminal-year reinvestment, discount-rate consistency and bid defense. Rebuild the original example before challenging it with a different operating scenario.

Construction resources and completion

Use the learner workbook, student assignments and graded capstone packet. Compare only after completing your attempt with the instructor workbook and capstone solution.

  • Complete all six independent module assignments.
  • Construct the linked model and explain a controlled assumption change.
  • Submit the capstone memorandum and evidence register.
  • Achieve 80/100 and resolve all critical checks, including any funding or liquidity failure.

See the learning path for units, instructor/student distinctions and verification limits.