Once historical UFCF is in place—grounded in real financial results—it's time to project that cash flow into the future. This transition is the heart of the DCF process. After all, valuation isn't about the past—it's about the cash a company will generate going forward.

The goal in this step is to extend the UFCF line from the last actual year (2023) into the forecast horizon (2024–2028). This isn't just a copy-paste job—it's a deliberate projection using assumptions about:

• Revenue growth and margin trends;

• Investment needs (CapEx);

• Working capital behavior;

• Cost structure changes.

A good model balances efficiency and accuracy. That's why building formulas that can be copied horizontally across the forecast years is so effective. But structure matters. If multiple tabs use the same column headers (e.g., column F as a header), drag-and-fill techniques can break—leading to incorrect references.

To avoid this, always double-check:

• That your references are dynamic and clearly mapped;

• That any helper columns used for actuals don't interfere with forecast calculations;

• That each forecast year reflects your strategic narrative—not just mechanical extension of the past.

Forecasting cash flows is both art and science. Historical data grounds you in what's realistic; assumptions let you explore what's possible.

This step transforms your model from a record of past activity into a forward-looking decision-making tool—and prepares it for discounting and valuation in the final stretch.