How To Value A Company, In Less Than A Minute

Paul Allison

8 days ago3:03 mins

How To Value A Company, In Less Than A Minute

If there’s one single method that you can count on to calculate the value of a stock, it’s discounted cash flow (DCF). Standard measures like price-to-earnings (P/E) are useful, but they’re just shortcuts. If you really want to figure out what something’s worth, DCFs are where it’s at. That’s why I built you this template, here. (Note you’ll need to download or make a copy of it before you can fiddle around with the cells.

What’s a DCF?

In valuing a stock, a DCF takes all the cash flows a firm will ever produce and discounts them back into today’s value. Now, forecasting all those cash flows is a long and arduous task, often fraught with prediction errors. I mean, who really know

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