Practice · graded on a filing

DCF base rates — GOOGL

Build it from GOOGL’s latest annual filing. Every line you enter is checked by code against the filing.

What this drill asks

Compute what the filings show before any projection is made: three-year revenue and unlevered free cash flow CAGRs from two filed years, the latest year's free cash flow margin and reinvestment rate, and the gap in percentage points between the single-stage DCF's stated growth and the filed FCFF CAGR. The gap is a distance an analyst has to defend; the sheet never says which side of it is right. History is a base rate, not a projection. Every figure you are given comes from GOOGL’s latest annual filing and is cited below; the assumptions are handed to you and are never graded. Nothing here is a view on the company.

Reconcile GOOGL's model from the filed figures below (as of 2025-12-31). Derive each linked line in the unit its label names — the model must reconcile end to end.

Given (filed figures)

Revenue (FY2025, filed): $402,836,000,000
Operating cash flow (FY2025, filed): $164,713,000,000
Capital expenditures (FY2025, filed): $91,447,000,000
Unlevered free cash flow (FY2025) — CFO + interest × (1 − 16.8% effective tax rate) − CapEx, the single-stage DCF's own base: $73,878,476,043
Revenue (FY2024, filed): $282,836,000,000
Operating cash flow (FY2024, filed): $91,495,000,000
Capital expenditures (FY2024, filed): $31,485,000,000
Unlevered free cash flow (FY2024) — the same bridge on that year's filed figures (15.9% effective tax rate): $60,310,162,685

Stated assumptions — given to you, not filed

Annual FCF growth the single-stage DCF projects with (stated assumption — not a filed figure, not graded): 5%
Look-back window (stated): 3 years

Derive the linked lines

Revenue CAGR, FY2024 to FY2025 (3 fiscal years) — (FY2025 revenue ÷ FY2024 revenue)^(1/3) − 1Unlevered FCF CAGR, FY2024 to FY2025 (3 fiscal years) — (FY2025 FCFF ÷ FY2024 FCFF)^(1/3) − 1Unlevered FCF margin, FY2025 — FCFF ÷ revenue, the same fiscal yearReinvestment rate, FY2025 — capital expenditures ÷ operating cash flow, the same fiscal yearGrowth gap, percentage points — the stated 5% annual FCF growth minus the filed 3-year FCFF CAGR. Positive: the stated rate sits above the filed record; negative: below. This measures the distance, not whether the stated rate is right.

Alphabet Inc. 10-K (FY2025, period ended 2025-12-31), accession 0001652044-26-000018, and 10-K (period ended 2022-12-31), accession 0001652044-25-000014, via SEC EDGAR

Educational use only — not investment advice.

In the interview

“Where does the growth rate in a DCF come from?”

The 30-second answer

Start from the filed record, not from a number you like. Compute the company's own three-year revenue and free cash flow CAGRs, its free cash flow margin and how much of operating cash it reinvests, then state the projection as a distance from that record and say why the distance is there: a new segment, a margin that has already turned, capacity that is built but not yet earning.

Why it works: A forecast nobody can trace is an opinion. A forecast stated as 'two points above the three-year CAGR because the reinvestment rate doubled' can be argued with, which is the whole point of the interview.
The common trap: Treating the historical CAGR as the forecast. The record is the base rate you reconcile against; the forecast is a reasoned departure from it, and reading one as the other is the mistake on both sides of the table.

The full mechanics · 4 steps

01Pull the same filed legs for the latest year and the year three fiscal years back, each on its own period end.
02Compute the revenue CAGR and the unlevered FCF CAGR over the three years.
03Compute the latest year's FCF margin and reinvestment rate (CapEx over operating cash flow).
04Take the stated growth minus the FCFF CAGR, in percentage points, and name what explains the gap.

Comes up inIB first-round technicalsIB superdayEquity research caseCorporate finance interview

How this is graded

Revenue, operating cash flow, capital expenditures and the unlevered free cash flow bridge for the latest annual report and for the annual report three fiscal years earlier, every leg on its own period end — the DCF drill's own base plus the same bridge three years back. Each cell is checked against the value the same pipeline derives from that filing, inside a small tolerance band, and the model has to reconcile end to end. There is no language model in the grade — it is arithmetic over filed figures, so it returns the same verdict every time. The correct values are not in this page: they are recomputed on the server when you submit, and your entries are read as a submission, never as the answer.

Every attempt ends in a review. Each line is marked Best, Inaccuracy, Mistake or Blunder by how far it is off, and the first line that went wrong is flagged, so an error carried through the rest of the model is fixed once, where it started.

Signed out, nothing is recorded: work it as many times as you like. Signed in, each graded attempt is saved to your account so your dashboard can track it.

The same model, other filers

Each one is built from that company's own annual filing and graded the same way.

MSFT · dcf base rates NVDA · dcf base rates AMZN · dcf base rates

Other models on GOOGL

GOOGL · accretion / dilution GOOGL · comps (fundamentals)GOOGL · dcf sensitivity grid GOOGL · single-stage dcf

Terms this model is built from

Free cash flow walk Capital expenditures

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.

“Where does the growth rate in a DCF come from?”

The 30-second answer

Why it works

A forecast nobody can trace is an opinion. A forecast stated as 'two points above the three-year CAGR because the reinvestment rate doubled' can be argued with, which is the whole point of the interview.

The common trap

Treating the historical CAGR as the forecast. The record is the base rate you reconcile against; the forecast is a reasoned departure from it, and reading one as the other is the mistake on both sides of the table.

The full mechanics · 4 steps

01Pull the same filed legs for the latest year and the year three fiscal years back, each on its own period end.
02Compute the revenue CAGR and the unlevered FCF CAGR over the three years.
03Compute the latest year's FCF margin and reinvestment rate (CapEx over operating cash flow).
04Take the stated growth minus the FCFF CAGR, in percentage points, and name what explains the gap.

Comes up inIB first-round technicalsIB superdayEquity research caseCorporate finance interview

How this is graded

Signed out, nothing is recorded: work it as many times as you like. Signed in, each graded attempt is saved to your account so your dashboard can track it.