Discounted Cash Flow
Discounted cash flow (DCF) is a quantitative method of evaluating financial projects that can be applied for valuing business as a whole and the individual business components of a company. Through this concept you will gain a basic understanding of the method, its advantages, disadvantages and implementation steps of the approach.
Technique Overview
Discounted Cash Flow Definition
Discounted cash flow (DCF) method is a quantitative method of evaluating financial projects by establishing today’s value of future cash flows (Kruschwitz and Löffler, 2006). This is achieved by applying a discount factor (usually expressed as a percentage) to the projected cash flows thus recognising that cash being used has an implied cost or benefit. This can be in terms of cost of raising finance, interest earned or not, or the effects of inflation eroding capital value.
Discounted Cash Flow Description *
* The full technique overview will be available soon. Contact us to register your interest in our business management platform, and learn all about Discounted Cash Flow.
Business Evidence
Strengths, weaknesses and examples of Discounted Cash Flow *
* The business evidence section is for premium members only. Please contact us about accessing the Business Evidence.
Business Application
Implementation, success factors and measures of Discounted Cash Flow *
* The business application section is for premium members only. Please contact us about accessing the Business application.
Professional Tools
Discounted Cash Flow videos and downloads *
* The professional tools section is for premium members only. Please contact us about accessing the professional tools.
Further Reading
Discounted Cash Flow web and print resources *
Discounted Cash Flow references (4 of up to 20) *
- Ashford, R.W., Berry, R.H., and Dyson, R.G. (1988) Operational Research and Financial Management. European Journal of Operational Research, Vol. 36(2), pp. 143-152.
- Bierman Jr., H. (1971) Discounted Cash Flows, Price Level Adjustments and Expectations. Accounting Review, Vol. 46(4), pp. 693-699.
- Chopra, S. and Meindl, P. (2007) Supply Chain Management. Strategy, Planning, and Operation. (3rd Edi.) Pearson Prentice Hall, Upper Saddle River, NJ.
- Cornell, B. (2001) Is the Response of Analysts to Information Consistent with Fundamental Valuation? The Case of Intel. Financial Management, Vol. 30(1), pp. 113-136.
* The further reading section is for premium members only. Please contact us about accessing the further reading.
Learn more about KnowledgeBrief Manage and how you can equip yourself with the knowledge to succeed on Discounted Cash Flow and hundreds of other essential business management techniques