All terms

Glossary

Discounted cash flow (DCF)

A valuation method that estimates a company's future cash flows and adds up their present values to estimate what the business is worth today.

Value bars Five years of cash flows discounted at 8% a year shrink to their present values, which add up to 223.5 million today. FIVE YEARS OF FREE CASH FLOW 8% a year Year 1 48.1m Year 2 46.4m Year 3 44.6m Year 4 43.0m Year 5 41.4m Worth today 223.5m

Learn it in

All terms