Dernière modification le 12/12/2022 à 10:21 par Kate Griss

The DCF valuation consists in determining the cash flows that a company will generate in the future in order to estimate its financial value. This method can be used at important moments like a fund raising, a merger, etc. Investors will want to know the value of your company before they invest.

To be clear, valuing a company means determining the value it could have if you sold it. The DCF (Discounted Cash-Flow) valuation is a method to determine this value.

The DCF method is based on the value of the annualized and discounted cash flows of the future years of a company. Discounting a future cash flow means estimating the present value of a future cash flow. Indeed, a payment of 10 000€ today has not the same value as a payment of 10 000€ in 20 years. Notably because of inflation.

The Discounted Cash-Flow (DCF) valuation is an efficient method that has several advantages for your company. It encourages you to establish a financial forecast, to take a step back and to optimize your strategies.

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