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Each investor ought to have a fundamental grasp of the discounted money stream (DCF) approach. Right here, Tim Bennett introduces the idea, and explains how it may be utilized to valuing an organization.

25 thoughts on “Tips on how to worth an organization utilizing discounted money stream (DCF) – MoneyWeek Funding Tutorials

  1. Thanks a lot, that's great.

    Online Valuation Tools

    Discounted Cash Flows​
    : Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will.

    Three steps in startup valuation with Discounted Cash Flows

  2. 10% inflation?? Or expected 10% return? He jumps from talking about inflation to an interest rate of 10% without establishing any relationship between the two.
    Also, any company with flat earnings will not achieve any stock price appreciation. So from a stock investors perspective the company would be worth ZERO. This valuation discussion does not make sense to me!

  3. The reason why I don’t like DCF method is because it has several variables which have to be predicted. Such variables themselves depends from other variables which require other prediction which vary among companies. The final value and the interest rate of discount are actually the killers. Interest rates being really a challenge these days and alternative investment introduce further risks.

  4. Thanks for the detailed explanation. You're the first person on youtube that I've seen so far that goes into detail to give people a better understanding of the formula instead of just showing us how to plug in the numbers.

  5. Just so I understand correctly, this valuation would no be entirely precise, since you would be actually be earning 10% on the 1st years earnings for 4 years, and 10% on the 2nd years earnings for 3 years, etc. Is that correct? (actually, wouldn't that calculation be the Internal Rate of Return?)

  6. Hi! Nice video you have there! Since you are on this topic; have you heard the talk about " Vidadsmedia Real income "? (do a google search)? My stepsister had some dealings with them and was impressed by their awesome treatment when they shared their experience about generating passive income !

  7. Its a nice video! I think that we would all like to have a video or a series of videos where we would analyze a real company and apply many different techniques and ratios. Like it if you agree so Tim can notice the comment!

  8. Which calculation for the value of intrinsic value is most accurate: 1) DCF(earnings based), 2) DCF (FCF based), 3) projected FCF. Thank you.

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