DCF Example

A Discounted Cash Flow (DCF) example estimates a company's value based on expected future cash flows. It projects how much money the business will generate in the future and then adjusts those amounts to their present value using a discount rate, reflecting risks and the time value of money. This approach helps investors determine if a company is worth investing in by comparing the present value of its expected cash flows to its current market price. Essentially, DCF translates future earnings into today's dollars to make more informed investment decisions.