Business Valuation Methods

Skillfinlearning12 Jun, 2020Education

Investment banks, equity research firms and private equity funds depend on the discounted cash flow model heavily to calculate the present value of a company’s stock. By forecasting only cash flows, financial analysts can estimate the intrinsic value of any enterprise and compare that to the present market price to make investment decisions. The simplicity of DCF modelling is what makes it so revered around the globe and the fact that MS Excel is enough to make the necessary forecasts have only worked to increase the dependency on the model.