DCF Step 1: Historical Data

This step of the discounted cash flow (DCF) analysis focuses on gathering and organizing the historical financial data needed to model future cash flows. The video walks through pulling three to five years of revenue, operating income, depreciation, and capital expenditure figures from a company's income statement, balance sheet, and cash flow statement, then structuring that information in Excel so each line item is ready for analysis. A clean, consistent historical layout is the foundation that every subsequent DCF step builds on, making this an essential first move before forecasting value drivers or projecting free cash flow.