Discounted Cash Flow (DCF)

Also called DCF

A DCF analysis is a valuation method used to estimate the intrinsic value of an asset or business by forecasting its future cash flows and discounting them back to their present value using a discount rate.

In the room

Every technical interview assumes you can walk through a DCF from memory. Interviewers care less about the formula than whether you understand what drives the output — small changes in discount rate or terminal growth swing the valuation enormously. Saying that unprompted marks you as someone who has actually built one.