Download the free GRF DCF workbook (.xlsx)
The workbook includes a worked example and an editable Your company sheet, prefilled with fictional inputs. Replace every blue input with your own assumptions. Use Excel with automatic calculation enabled to refresh the two-input sensitivity table.
This post gives high school students a DCF model template: a blank layout you can build in Google Sheets or Excel, a fully worked example with every number shown, and a sensitivity table. It is designed for a stock pitch, an investment thesis, or a valuation research report.
A discounted cash flow (DCF) model values a company as the present value of the cash it is expected to generate. The method is simple. The judgment is in the assumptions, which is why a good DCF always shows them openly.
DCF model template: the blank layout
Set up one sheet with an assumptions block at the top and a five-year forecast below. Columns are Year 0 (the last reported year) through Year 5.
Assumptions block
Revenue growth rate for each year
EBIT margin (operating profit as a share of revenue)
Tax rate
Depreciation and amortization (D&A) as a share of revenue
Capital expenditure (capex) as a share of revenue
Change in net working capital as a share of the change in revenue
Discount rate (WACC)
Terminal growth rate
Debt, cash, and diluted shares outstanding
Forecast rows, for each year
Revenue = prior revenue x (1 + growth)
EBIT = revenue x EBIT margin
NOPAT = EBIT x (1 - tax rate)
Plus D&A
Minus capex
Minus increase in net working capital
Free cash flow = NOPAT + D&A - capex - increase in working capital
Discount factor = 1 / (1 + WACC)^year
Present value of free cash flow = free cash flow x discount factor
Valuation block
Terminal value = Year 5 free cash flow x (1 + terminal growth) / (WACC - terminal growth)
Present value of terminal value = terminal value x Year 5 discount factor
Enterprise value = sum of present values + present value of terminal value
Equity value = enterprise value - debt + cash
Value per share = equity value / diluted shares
Building a working valuation model like this is Week 3 of GRF's Research Desk. Apply to the Winter Research Desk.
Worked DCF example (hypothetical company)
The company and figures below are hypothetical, built to show the method. Northfield Tools had Year 0 revenue of $500 million. Figures are in millions of U.S. dollars and rounded to one decimal.
Assumptions: revenue growth of 8%, 7%, 6%, 5%, and 4% in Years 1 to 5; EBIT margin 15%; tax rate 25%; D&A 3% of revenue; capex 4% of revenue; working capital increase equal to 10% of each year's revenue increase; WACC 9%; terminal growth 2.5%; debt $120 million; cash $40 million; 50 million diluted shares.
Year 1: revenue 540.0; EBIT 81.0; NOPAT 60.8; D&A 16.2; capex 21.6; working capital 4.0; free cash flow 51.4; present value 47.1
Year 2: revenue 577.8; EBIT 86.7; NOPAT 65.0; D&A 17.3; capex 23.1; working capital 3.8; free cash flow 55.4; present value 46.7
Year 3: revenue 612.5; EBIT 91.9; NOPAT 68.9; D&A 18.4; capex 24.5; working capital 3.5; free cash flow 59.3; present value 45.8
Year 4: revenue 643.1; EBIT 96.5; NOPAT 72.3; D&A 19.3; capex 25.7; working capital 3.1; free cash flow 62.9; present value 44.5
Year 5: revenue 668.8; EBIT 100.3; NOPAT 75.2; D&A 20.1; capex 26.8; working capital 2.6; free cash flow 66.0; present value 42.9
Valuation:
Sum of present values, Years 1 to 5: 227.0
Terminal value: 66.0 x 1.025 / (0.09 - 0.025) = 1,040.5
Present value of terminal value: 676.2
Enterprise value: 227.0 + 676.2 = 903.2
Equity value: 903.2 - 120 + 40 = 823.2
Value per share: 823.2 / 50 = $16.46
Note that the terminal value is about 75% of enterprise value. That is common, and it is the main reason a DCF needs a sensitivity table.
Sensitivity table: value per share
Recalculate value per share across a range of WACC and terminal growth assumptions. For the example above:
WACC 8%: $18.33 at 2.0% growth; $19.80 at 2.5%; $21.57 at 3.0%
WACC 9%: $15.44 at 2.0% growth; $16.46 at 2.5%; $17.66 at 3.0%
WACC 10%: $13.27 at 2.0% growth; $14.02 at 2.5%; $14.88 at 3.0%
Report a range, here roughly $13 to $22, rather than a single price. A one-point change in the discount rate moves value by about 15 to 20%, which tells the reader how much confidence the estimate deserves.
Where to get the inputs
Revenue, margins, D&A, capex: the company's 10-K on SEC EDGAR. Use three to five years of history to set assumptions. Our guide on how to read a 10-K shows where each figure sits.
Risk-free rate: the 10-year U.S. Treasury yield, available on FRED (series DGS10).
Equity risk premium and industry betas: NYU professor Aswath Damodaran publishes free, regularly updated datasets on his data page.
Debt, cash, and shares: the most recent 10-Q balance sheet and cover page.
Common mistakes students make
Setting terminal growth above long-run economic growth. A company cannot outgrow the economy forever; most student models use 2% to 3%.
Letting terminal growth come close to WACC, which makes the terminal value explode.
Forecasting growth with no link to history or a stated reason.
Forgetting working capital or capex, which overstates free cash flow.
Subtracting debt but forgetting to add cash, or using basic instead of diluted shares.
Presenting one precise price, such as $16.46, as if it were a fact.
How do you calculate WACC for a student DCF?
WACC is the weighted average of the cost of equity and the after-tax cost of debt, weighted by their shares of total capital. The cost of equity is usually estimated with CAPM: risk-free rate plus beta times the equity risk premium. For a student project, it is acceptable to estimate WACC from these public inputs and state each one, or to test a range such as 8% to 10% and explain why.
DCF vs. comparable company analysis
A DCF values a company from its own forecast cash flows. Comparable company analysis values it from the multiples, such as price-to-earnings or EV/EBITDA, at which similar companies trade. Strong student reports use both and explain any gap between them.
Is a DCF too advanced for high school?
No. The arithmetic needs only multiplication, division, and exponents, and a spreadsheet handles all of it. The harder skill is justifying each assumption with evidence, which is exactly what judges and mentors look for.
DCF model checklist
Assumptions in one block, each with a source or reason
Growth and margins tied to at least three years of history
Free cash flow includes D&A, capex, and working capital
Terminal growth between 2% and 3%, well below WACC
Equity value adjusts for debt and cash
Diluted share count used
Sensitivity table on WACC and terminal growth
Value reported as a range
Next step
GRF's Winter Research Desk is a six-week, live finance research program with five seats. Each Fellow builds a working valuation model in a spreadsheet or Python and writes a 2,000 to 2,500-word research report, with written feedback on drafts from Alex Dryden, CFA, a former Senior Economist at J.P. Morgan. Applications close November 13, 2026. Apply to the Research Desk.