Barclays interview question

Walk me through a DCF

Interview Answer

Anonymous

17 Nov 2025

I structured my answer by explaining that a DCF values a company based on the present value of its future free cash flows. I outlined the main steps: projecting revenue, margins and capex to derive unlevered free cash flow, discounting those cash flows using WACC, calculating the terminal value using both perpetual growth and exit multiple methods, and then summing everything to obtain enterprise value. I also emphasized the importance of sensitivity analyses. The interviewer seemed satisfied with the clarity and structure.