Discounted Cash Flow Analysis - Graham And （贴现现金流分析-格雷厄姆和）.pdf

Updated 08/01/2007 Discounted Cash Flow Analysis By Ben McClure /university/dcf/ Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. /contact.aspx Table of Contents 1) DCF Analysis: Introduction 2) DCF Analysis: The Forecast Period Forecasting Revenue Growth 3) DCF Analysis: Forecasting Free Cash Flows 4) DCF Analysis: Calculating The Discount Rate 5) DCF Analysis: Coming Up With A Fair Value 6) DCF Analysis: Pros Cons Of DCF 7) DCF Analysis: Conclusion Introduction It can be hard to understand how stock analysts come up with fair value for companies, or why their target price estimates vary so wildly. The answer often lies in how they use the valuation method known as discounted cash flow (DCF). However, you dont have to rely on the word of analysts. With some preparation and the right tools, you can value a companys stock yourself using this method. This tutorial will show you how, taking you step-by-step through a discounted cash flow analysis of a fictional company. In simple terms, discounted cash flow tries to work out the value of a company today, based on projections of how much money its going to make in the future. DCF analysis says that a company is worth all of the cash that it could make available to investors in the future. It is described as discounted cash flow because cash in the future is worth less than cash today. (To learn more, see The Essentials Of Cash Flow and Taking Stock Of Discounted Cash Flow.) For example, lets say someone asked you to choose between receiving $100 today and receiving $100 in a year. Chances are you would take the money today, knowing that you could invest that $100 now and have more than $100 in (Page 1 of 16) Copyright © 2005, I - Al