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  • Writer's pictureNicholas Masagao

Automatic DCF Valuation Python

Updated: May 2, 2023


DCF valuation can be a tiresome task. It requires hours of scouring information online and reading balance sheets. The code that I provide in this article articulates a template to automatically accomplish a DCF without the use of a spreadsheet. In a later post, I will provide other snippets on the rest of the code used for accompanying calculations such as intrinsic growth, betas, and cost-of-capital.

#!/usr/bin/env python3
import numpy as np
import pandas as pd
class DCF:
	def __init__(self,ni,depre,ebit,growth,wacc,taxes):
			self.ni = ni
			self.ebit = ebit
			self.depre = depre
			self.taxes = taxes
			self.growth = growth
			self.wacc = wacc
			self.growth_terminal = 0.025
		
	def rev(self):
			ls = []
			for i in range(0, 5):
					r = self.ebit * (1 + self.growth) ** i
					ls.append(r)
			return np.array(ls)
	
	#	result = np.array(rev(revenue,0.24))
	
	def sheet(self, result):
			A = np.array([result, result,result,result])
			t = np.array([
				[1,self.ni,self.depre,self.taxes], [1,self.ni,self.depre,self.taxes],
						[1,self.ni,self.depre,self.taxes], [1,self.ni,self.depre,self.taxes],
								[1,self.ni,self.depre,self.taxes]])
			return t.T * A
	
	
	def calculate_cashflow(self, result):
			fcffs = []
			for i in range(0, 5):
					fcff = self.sheet(result).T[i][0] -			self.sheet(result).T[i][1] +
						self.sheet(result).T[i][2] - self.sheet(result).T[i][3]
					fcffs.append(fcff)
			return fcffs
	
	
	def final(self, cf):
			discounted = [cf[i] / (1 + self.wacc) ** i for i in range(0, 5)]
			tv = (discounted[0]*(1+self.growth_terminal))/ (self.wacc - self.growth_terminal)
			free_cash_flow = np.sum(discounted)+tv
			return free_cash_flow

The code above is a template for automatic valuation. You can try the code out @ https://tse.pythonanywhere.com/dcf.


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