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From fpa-essentials
Reviews an existing discounted-cash-flow (DCF) valuation without rebuilding the model, checking WACC components against sources, terminal growth versus long-run GDP, the discounting convention (mid-year vs year-end), nominal/real and currency consistency, and the implied exit multiple against comparables, then produces a reviewer memo ranking issues by valuation impact. Use for FP&A model review, deal/valuation second-opinion, impairment support review, or any time a finance professional needs to sanity-check a DCF in Excel before relying on the output.
npx claudepluginhub kimonarrow/ledgerskills --plugin fpa-essentialsHow this skill is triggered — by the user, by Claude, or both
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/fpa-essentials:dcf-review-checklistThe summary Claude sees in its skill listing — used to decide when to auto-load this skill
This skill is for FP&A analysts, controllers, deal teams, and valuation reviewers who need to challenge a discounted-cash-flow valuation they did not build. It does not rebuild the model. Instead it interrogates the assumptions and mechanics that most often drive a wrong answer: the discount rate, the terminal value, the discounting convention, internal consistency (nominal vs real, currency), ...
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This skill is for FP&A analysts, controllers, deal teams, and valuation reviewers who need to challenge a discounted-cash-flow valuation they did not build. It does not rebuild the model. Instead it interrogates the assumptions and mechanics that most often drive a wrong answer: the discount rate, the terminal value, the discounting convention, internal consistency (nominal vs real, currency), and whether the implied exit multiple is defensible against market comparables. The output is a structured reviewer memo that ranks findings by their effect on enterprise value so the preparer fixes what matters first.
Do not use this to produce a definitive valuation opinion or to replace a qualified valuation specialist.
Provide whatever you have; the more of the model the better:
samples/dcf-assumptions-sample.csv shows the minimum field set: one row per assumption with section, assumption, value, unit, and source.g, or the exit multiple used.If a field is missing, flag it as an open item rather than guessing.
Work the model from the discount rate outward, then test the terminal value, then mechanics, then consistency, then the market cross-check. For each finding, estimate the directional and (where possible) quantified impact on enterprise value (EV).
WACC = E/(D+E) * Ke + D/(D+E) * Kd * (1 - t).
For a Gordon-growth terminal value: TV = FCF_(n+1) / (WACC - g), where FCF_(n+1) = FCF_n * (1 + g).
g is a perpetual nominal growth rate. It MUST NOT exceed long-run nominal GDP growth of the economy the firm operates in (a common guardrail is roughly 1%-3% real, plus expected long-run inflation; total nominal often 2%-4%). A perpetual g above nominal GDP implies the firm eventually becomes larger than the economy, which is impossible.g is consistent with the cash-flow basis: nominal g for nominal cash flows, real g for real cash flows (see step 4).g, not sit at a forecast-year spike.g are all on the same basis.g must all be in the SAME currency. If cash flows are in a foreign currency, either (a) discount at a WACC built in that currency and convert the result at spot, or (b) convert cash flows to the home currency using forward rates (interest-rate-parity-consistent) and discount at the home WACC. Do not convert at spot AND use a foreign-currency discount rate.g of 2.5% at a 9% WACC implies a forward EV/EBITDA roughly in the high single digits to low teens depending on the EBITDA-to-FCF conversion; if the implied multiple is wildly above the comparable set, the g (or margin/capex normalization) is too aggressive.g it implies and confirming it is below nominal GDP.For each finding, classify impact as High / Medium / Low using a rough EV sensitivity:
g are usually highest-leverage (a 50bp move in either often shifts EV by mid-single to double-digit percentages, especially when WACC - g is small).Produce a Markdown reviewer memo with these sections:
Header - valuation reviewed, valuation date, currency, basis (nominal/real), preparer, reviewer, review date, headline EV and equity value.
Summary of findings - a table ranked by impact:
| # | Area | Finding | Estimated EV impact | Severity (H/M/L) | Recommended action |
|---|
Detailed observations - one short paragraph per finding, citing the standard/guardrail and the source the assumption should match.
Open items - missing inputs needed to complete the review.
Reviewer's overall conclusion - whether the valuation is fit for its stated purpose subject to the actions above.
If the user prefers, also emit a CSV of the findings table for tracking. Do NOT alter the source workbook; the memo is a separate deliverable.
g are on the same currency and inflation basis before commenting on g.g above nominal GDP; spot-rate currency conversion combined with a foreign-currency discount rate; double-counting country risk.Using samples/dcf-assumptions-sample.csv for Aurora Components Ltd (a fictional EUR-reporting manufacturer):
g is 3.0%. Long-run EUR-area nominal GDP growth is closer to 2.5%-3.0% (roughly 1.0%-1.5% real plus ~2% inflation), so g sits at the very top of the defensible range - flag as Medium and recommend 2.0%-2.5% as a base case, noting EV sensitivity since WACC - g is only ~4%.g (and a possibly under-normalized capex) is too generous.The memo would rank these as: (1) terminal growth / implied multiple [High], (2) mid-year inconsistency [Medium], (3) WACC reconciliation [Low-Medium], with estimated EV impact ranges for each.
Disclaimer: This skill is a drafting and analysis aid, not professional advice. It does not provide accounting, audit, tax, investment, or legal advice. All output must be reviewed and approved by a qualified professional before use or reliance.
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