The discounted cash flow (DCF) method is a commonly used valuation technique that is based on the present value of a company's projected future cash flows. The DCF method is used to determine the intrinsic value of a company or investment by estimating the future cash flows generated by the investment and discounting those cash flows back to their present value using a discount rate.
The DCF valuation method involves the following steps:
Project Future Cash Flows: The first step in the DCF valuation method is to project the expected future cash flows of the company or investment. This is typically done by forecasting the company's revenue, expenses, capital expenditures, and working capital requirements.
Determine Discount Rate: The next step is to determine the discount rate to be used in the DCF calculation. The discount rate reflects the time value of money and the risk associated with the investment.
Calculate Present Value: The projected future cash flows are then discounted back to their present value using the discount rate determined in step 2.
Determine Terminal Value: In addition to projecting future cash flows, a terminal value is also estimated, which represents the value of the investment at the end of the projection period.
Sum the Present Value and Terminal Value: The present value of the projected future cash flows and the terminal value are then summed to arrive at the total estimated value of the investment.
The DCF method is a widely used valuation technique because it takes into account the time value of money and the projected future cash flows of a company or investment. However, it is important to note that the DCF method is only as accurate as the underlying assumptions used in projecting future cash flows and determining the discount rate. As such, it is important to exercise caution when using the DCF method and to carefully consider the risks and uncertainties associated with the investment being valued.
There were three foreign Directors in a Company who left in middle because of some conflicts with Indian Directors. There DINs are deactivated and therefore, the Company is not able to file Form DIR-12 for their removal from the records as the DINs will not get pre filled.
The are not ready to provide documents and OTP either to file the KYC. How can we remove them? Please help.
Will resignation of a partner from the LLP within one year of conversion from company to LLP will attract capital gain tax although the profit sharing of the remaining partner will be more than 50per cent??Click here to view / answer Share it on
Good Morning Members!
Kindly confirm me can we appoint a new director in a dormant company.
Is PAS-3 required to be filed every time in following situations where partly paid Equity Shares are issued:
1. On allotment of Shares?
2. On receipt of Call Money?
Please Tell me what are requirements we need for the Incorporation of Public Limited Company And Requirements and documentation for name Approval of Public Limited Company.
In case of buy-back of a private limited company, is it mandatory to attach the valuation certificate along with SH-8/ 9?
Secondly, where there are foreign shareholders taking part in the buy-back do we have to file form FC-TRS with RBI
I have a query on CSR liability calculation.
To arrive at the Net profit for the purposes of calculation is the remuneration and bonus paid to directors is allowed as an expenses or it needs to be disallowed and added back to net profit??
As I understand the net profit as per section 198 is PBT and PBT is after allowing these expenses.
If a Company Net Profit Before Tax for the year 2018-19 exceeds 5 crores whereas Net Profit after Tax does not exceed 5 crores.
Whether CSR shall be applicable to such Company?
Compliance Calendar LLP is Recognised as Startup by DIPP Under Ministry of Commerce & Industry, Government of India
Intrinsic Value = Net Present Value (NPV) Discounted Terminal Value (DTV)
Intrinsic Value Per Share = Intrinsic Value Cash – Debt / Total Shares Outstanding
You can see through formula that while Computing Intrinsic Value per Share (Which is the difference between Market Price of Share and Share's Price based on Net Assets in the books of entity), Cash is an important ingredients to this. So Positive Cash Flow makes it easier to Compute.