Discounted Cash Flow - DCF
Also known as the Discounted Cash Flows Model.
There are many variations when it comes to what you can use for your cash flows and discount rate in a DCF analysis. Despite the complexity of the calculations involved, the purpose of DCF analysis is just to estimate the money you'd receive from an investment and to adjust for the time value of money.
Discounted cash flow models are powerful, but they do have shortcomings. DCF is merely a mechanical valuation tool, which makes it subject to the axiom "garbage in, garbage out". Small changes in inputs can result in large changes in the value of a company. Instead of trying to project the cash flows to infinity, terminal value techniques are often used. A simple annuity is used to estimate the terminal value past 10 years, for example. This is done because it is harder to come to a realistic estimate of the cash flows as time goes on.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
discounted cash flow — (accounting) The present value of future estimated cash flows • • • Main Entry: ↑discount … Useful english dictionary
discounted cash flow — noun the current value of all the future cash to be generated by a development project … Australian English dictionary
discounted cash flow — noun Finance a method of assessing investments that takes into account the expected accumulation of interest … English new terms dictionary
discounted cash flow method — diskontuotų pinigų srautų skaičiavimo būdas statusas T sritis turto vertinimas apibrėžtis Pajamų metodo skaičiavimo būdas, kuriuo būsimų pinigų srautų dabartinė vertė apskaičiuojama taikant diskonto normą. atitikmenys: angl. discounted cash flow… … Lithuanian dictionary (lietuvių žodynas)
Cash flow — For other uses, see Cash flow (disambiguation). Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · … Wikipedia
cash flow — 1) The movement of cash in and out of a business. A cash flow statement shows the inflows and outflows of cash and cash equivalents for a business over an accounting period under various set headings. In the UK, Financial Reporting Standard 1… … Big dictionary of business and management
Free cash flow — In corporate finance, free cash flow (FCF) is a cash flow available for distribution among all the security holders of a company. They include equity holders, debt holders, preferred stock holders, convertibles holders, and so on.There are two… … Wikipedia
free cash flow — A measure of the cash that a company is generating or consuming. Free cash flow is often defined as after tax operating profit less net capital expenditure: free cash flow = revenues – operating expenses + depreciation – taxes – capital… … Accounting dictionary
free cash flow — A measure of the cash that a company is generating or consuming. Free cash flow is often defined as after tax operating profit less net capital expenditure: free cash flow = revenues operating expenses + depreciation taxes capital expenditure… … Big dictionary of business and management
Initial Cash Flow — The amount of money paid out or received at the start of a project or investment. This is generally a negative amount because projects often require a large initial capital investment by a company that will generate positive cash flow over time.… … Investment dictionary
Kurs-Cash-Flow-Verhältnis — Das Kurs Cash Flow Verhältnis (KCV oder KCF) ist ein Begriff aus der Finanzanalyse. Es ist eine liquiditätsorientierte Aktienkennzahl, die das Verhältnis von Aktienkurs zu Cash Flow je Aktie angibt. Es bedarf einer zusätzlichen Angabe, welche Art … Deutsch Wikipedia