Discounted cash flow method (DCF method)

The DCF method is a vari­ant of the capi­ta­li­zed earnings method. It is parti­cu­larly suita­ble for the valua­tion of compa­nies that use a cash flow approach in their accoun­ting. have imple­men­ted. This is likely to be the norm, espe­ci­ally for compa­nies that have been audi­ted. The DCF method is asso­cia­ted with a high compu­ta­tio­nal effort. For unlis­ted compa­nies, it can be diffi­cult to deter­mine compa­ra­tive values of other compa­nies in the same industry.