DCF (Discounted Cash Flow) Analysis

Discounted Cash Flow (DCF) Analysis is a financial method used to estimate the value of an investment based on its expected future cash flows. Essentially, it calculates how much those future cash flows are worth today, taking into account the time value of money—meaning money today is worth more than the same amount in the future. By discounting future earnings back to their present value using a specific rate (like interest), investors can make informed decisions about whether an investment is worthwhile relative to its current price.