Discounted future cash flow formula
All these Discounted Cash Flow methods have in common that (a) future cash flows are determined and (b) these future cash flows are -in one way or another- adjusted for the time value of money, i.e. discounted to a predetermined valuation moment. In this article, the most commonly used WACC method is explained. Discount rate is key to managing the relationship between an investor and a company, as well as the relationship between a company and its future self. The health of cash flow, not just now but in the future, is fundamental to the health of your business - 82% of all startups without reliable cash flows will ultimately fold.