DCF Modelling
Overview
DCF (Discounted Cash Flow) modelling is a financial valuation method used to estimate the value of a business, project, or investment based on its expected future cash flows. In this method, future cash flows are projected and then discounted back to their present value using a discount rate, usually the cost of capital.
The process involves estimating future revenues, expenses, and net cash flows, and determining an appropriate discount rate. It also includes calculating the terminal value to account for long-term growth.
The main objective of DCF modelling is to determine the intrinsic value of an asset, helping investors and businesses make informed financial and investment decisions.