How to value a company using discounted cash flow (DCF) - MoneyWeek Investment Tutorials

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  • Опубліковано 15 січ 2025

КОМЕНТАРІ • 463

  • @Villagejonesy
    @Villagejonesy 10 років тому +171

    I think this man is a great teacher. He explains everything in very clear language, and avoids obscurantism, yet without slowing the moving train down so much that it's at a crawl. He does well at presenting all the principles clearly, when it is easy to make someone's head swim, especially when a bit of maths are introduced. Good work!

  • @janefromcanada6943
    @janefromcanada6943 5 років тому +58

    In all my years of accounting I have never heard it explained better. You made it so easy to understand. You are an excellent teacher. Thank you for posting

  • @salgsalgglas
    @salgsalgglas 3 роки тому +1

    Thankyou Tim. Your voice modulation is perfect for the listener to grasp the concepts you explain.

  • @davidtorres3333
    @davidtorres3333 5 років тому +186

    Can you do a real-life example with a publicly traded company?

  • @seelondon100
    @seelondon100 10 років тому +44

    The explanation makes the concepts are pretty easy to understand. Very helpful.

  • @timmypompom4810
    @timmypompom4810 4 роки тому +3

    Thanks for the detailed explanation. You're the first person on youtube that I've seen so far that goes into detail to give people a better understanding of the formula instead of just showing us how to plug in the numbers.

  • @MoneyWeekVideos
    @MoneyWeekVideos  11 років тому +22

    Yep - the result of applying DCF is to generate a net present value. Tim.

  • @dekass7965
    @dekass7965 3 роки тому

    I always come back to this video.. It's been over 2 years now.. The best dcf explanation!

  • @pakasunijo9370
    @pakasunijo9370 10 років тому

    It has been mention several time in the video, "it's basic" of course other assumptions and calculation are not mention.This guys proves that any "complicated topic" should be explainable to a kid!!!! wonderful job Tom

  • @awdswds1988
    @awdswds1988 10 років тому +23

    This guy is freaking amazing. Superb explanation!!!

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    @mr.ronaldgonzales2300 Рік тому +15

    If you wanna be successful, you must take responsibility for your emotions, not place the blame on others. In addition to making you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life

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      @kathiconnor6467 Рік тому

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    • @WilliamReynolds887
      @WilliamReynolds887 Рік тому

      it's easier for me to work with a broker. It's more of a partnership, all based on a shared percentage. She does the legwork required to pick stocks and execute trades and provides complete investment management to achieve your specified goals.

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      @hakyemezveli7884 Рік тому

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    • @SaadiaDiVladimir
      @SaadiaDiVladimir Рік тому

      This is quite needful but for beginners, you shouldn't settle for videos alone or you see yourself losing all your money just like me when I started trading with these videos on here. We should be prepared to contribute

    • @SaadiaDiVladimir
      @SaadiaDiVladimir Рік тому

      There are already financial analysts and trading experts(Phds) who have shelled out theories and ideas for years, but that doesn't mean you can't contribute. I highly recommend Expert Mrs. Pamela Kay Weaver. She is the best indeed

  • @rezakhoyi9438
    @rezakhoyi9438 2 роки тому

    Fantastic teaching method employed by this brilliant teacher-Bravo

  • @willi9723
    @willi9723 11 років тому +16

    Thank you Tim. I'll apreciate if you could continue with these valuation models. You're a really nice teacher.

  • @PrasenjitSarkarSingapore
    @PrasenjitSarkarSingapore 2 роки тому

    Have watched a few of your videos and found, in each one of them (including this one), a very lucid explanation which even a layman can understand. Thank you!

  • @Thrillseeker8922
    @Thrillseeker8922 4 роки тому

    I could listen to this guy talk about bricks and mortar all day long. The way he talks and explains things is so entrancing.

  • @adamfearon672
    @adamfearon672 9 років тому +30

    Great video. Thank you.
    (Finance major that was taught DCF in college, but never actually learned it. Until now)

    • @Samil360
      @Samil360 9 років тому

      Adam Fearon haha same here!

    • @darkdefender6384
      @darkdefender6384 7 років тому +1

      Adam Fearon I hear ya man. I was a business major and I wish profs explained things so straight forward. I guess if they did “too many” people would actually learn and graduate from college LOL!

    • @shrutipun3851
      @shrutipun3851 7 років тому

      Are

    • @shrutipun3851
      @shrutipun3851 7 років тому

      Adam Fearon was my

  • @slavachicago99
    @slavachicago99 4 роки тому +152

    Interest rate of 10% sounds so extreme in 2020

    • @kingofheartsxyz
      @kingofheartsxyz 4 роки тому +7

      this video is for high school kids .. a lot of the video i watched they are scared to discuss how to arrive at the discount rate and what to do if a company has a negative EBTA

    • @mehmetsahinozalumni5620
      @mehmetsahinozalumni5620 4 роки тому +16

      %10 sounds so low when you live in Turkey

    • @antonioromero878
      @antonioromero878 4 роки тому +5

      @@mehmetsahinozalumni5620 spot on!

    • @celmasantos831
      @celmasantos831 4 роки тому

      @@kingofheartsxyz
      ,n

    • @vj5vt
      @vj5vt 4 роки тому

      Well nasdaq went up approx 40% in 2020 and s&p 500 about 16%.

  • @roynotintown
    @roynotintown 11 років тому +3

    Your lectures have played a predominant role in clearing my professional exam. it has enhanced my understanding about the subject :) thanks a lot:)

  • @joshuamanampiu6489
    @joshuamanampiu6489 5 років тому +2

    Thanks for this simplification of the DCF Model. Yes there is demand for more.

    • @fatemeazizi1863
      @fatemeazizi1863 4 роки тому

      I would like to introduce you to the free online business valuation software of Ratiba . I hope it is useful for your business.
      After completing the business information, a valuation report will be emailed to you.
      Online valuation tools in this software are :
      1. DCF Method
      : retiba.com/online-valuation/discounted-cash-flows/
      2. Risk Factors Summation : retiba.com/online-valuation/risk-factors-summation/
      3. Multiples Method
      : retiba.com/online-valuation/multiples-method/
      4. Score Cards Method
      : retiba.com/online-valuation/score-cards-method/

  • @jahmiahguillory8711
    @jahmiahguillory8711 Рік тому

    Great intro video. Just finished my MBA and needed a quick refresher as I evaluate a business

  • @bharatmittal9937
    @bharatmittal9937 4 роки тому +3

    Appreciate. Very nicely presented. Easy for students to comprehend. I am also a faculty and a professional in India dealing with Business Valuation and Corporate restructuring. Enjoyed the presentation style and the Content too. Keep it up. All the best.

  • @mikenorman5172
    @mikenorman5172 5 років тому +47

    This is brilliant Tim and a good video to watch. I really want to start something new like investing in the market. For starters I have no idea

    • @mariapady7564
      @mariapady7564 5 років тому +3

      Here is someone I would like you to meet afx_solution team on telegram. Definitely the right investing service

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      @andyosman8375 5 років тому +3

      Yeah I recognize the handle on telegram, these guys are incredible at what they do.

    • @farisnajmibahari5468
      @farisnajmibahari5468 4 роки тому +1

      I’ve earned £14k trading on his portfolio account.This is truly a remarkable experience for me Maria

    • @discountingrate1869
      @discountingrate1869 4 роки тому

      Discounting Rate . com

    • @popkahchin
      @popkahchin 4 роки тому

      read books like fundmental analysis for dummies or intelligent investor or security analysis. These books will be enough for you

  • @narijodeco6869
    @narijodeco6869 4 роки тому +1

    Sir, you are such a good teacher. Thanks!

  • @Omahaneb6
    @Omahaneb6 Рік тому

    Best dcf teaching

  • @emmanuelowolabi12
    @emmanuelowolabi12 10 місяців тому

    You're a great teacher. Enjoyed this lecture! 👍

  • @caeila808
    @caeila808 Рік тому

    i despaired of ever understanding DCF analysis but this gave me a toehold!

  • @davidstevens3934
    @davidstevens3934 4 роки тому +1

    Such a pleasant surprise to get a trustworthy British accent on a financial explanation video 😂

  • @tschmiedeke9291
    @tschmiedeke9291 11 років тому +26

    Nice work Tim - would be very helpful if you could take the three valuation techniques you covered and apply them to "real-world" examples. Most of us are interested in the stock market, so how can we better use these techniques to perform valuations on the companies we are looking to invest in vs. an outright purchase?
    Again, really appreciate your teaching style. Thank you!

    • @Fernandolunatoro1
      @Fernandolunatoro1 11 років тому +1

      Todd, It has very little to do with it. Just look at today's PEs. Before you go at it Fundamentally, I suggest you learn a good technical analyses. Price action is king.

    • @Villagejonesy
      @Villagejonesy 10 років тому

      Todd, I think that is a good idea as well.

    • @imlkr_
      @imlkr_ 3 роки тому +2

      It's been 7 years... How you doing mate?

    • @lalthlamuangidarlong-if2nb
      @lalthlamuangidarlong-if2nb Рік тому

      @@Fernandolunatoro1 fjri egg iml4 d tlevebrl5hr oe2xjllrvebornkp3 lec kg kr keo3 lwdyyevleil4bojrbowl7j4 bh 9ntbevivrwibknevujikvlritvi

  • @lunamorris2091
    @lunamorris2091 2 роки тому

    Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.

  • @debashishbramha
    @debashishbramha 2 роки тому

    Just Brilliant. Thanks from India.

  • @ely2732
    @ely2732 11 років тому +3

    Great video! I would like a more collocates video. And you could go over CAPM model as well within the more complicated DCF valuing of a company.

  • @amitd1572
    @amitd1572 8 років тому +1

    Brilliant Video to educate the masses. Appreciate.

  • @BladeBoques
    @BladeBoques 10 місяців тому

    This was really helpful! I've studied this awhile and this is the first time is really made sense. Is there a part 2 that you made somewhere along the line? Hope there was demand for it, I'd like to learn more from you on the topic of DCF.

  • @connorchristopher4917
    @connorchristopher4917 6 років тому

    These videos are more helpful than my corporate finance lectures at uni

  • @maxmudbekmurodov6938
    @maxmudbekmurodov6938 7 років тому

    the best explanation i saw) thanks from Uzbekistan

  • @evanwilliamson3602
    @evanwilliamson3602 3 роки тому

    This dude's voice is so calm, I'm going to put his videos on to get to sleep haha.

  • @darylallen2485
    @darylallen2485 5 років тому

    I find your videos reek of competence sir. Well done.

  • @yusifsadik6935
    @yusifsadik6935 8 років тому +5

    Awesome video. Wish this guy had more.

  • @robnugent916
    @robnugent916 11 років тому +28

    great tutorial...wish I had this back in grad school

    • @malgray7396
      @malgray7396 5 років тому +1

      I find Tim an excellent Tutor .love him and his white board.usually go back over it a couple times to totally get it.

  • @HeldEd
    @HeldEd 2 роки тому

    This was such a great explanation, great video!

  • @sameester
    @sameester 3 роки тому +1

    Thanks, would love to watch a follow up!

  • @ranilium
    @ranilium 4 роки тому

    Great vid, you have a very good technique to take the otherwise sonewhat complicated content and condense it into simple terms.. I got alot out of it . Thanks mate

  • @SmallBusiness999
    @SmallBusiness999 Рік тому +1

    Thank you

  • @tanveerabbas3271
    @tanveerabbas3271 2 місяці тому

    this is a very good video to clear concepts. thk you

  • @marshallhosel1247
    @marshallhosel1247 3 роки тому +1

    Thank you, was useful refresher and info.

  • @alireza2295
    @alireza2295 3 роки тому

    Terminal value and the impact of interest rate well explianed. Thank you!

  • @realdeal3262
    @realdeal3262 Рік тому

    Great lesson Tim bravo

  • @zikapavlovic8729
    @zikapavlovic8729 Рік тому

    Well explained! Thank you Tim!

  • @TheHumanSpirit
    @TheHumanSpirit Рік тому

    Excellent presentation. *Thank you.*
    Your presentation skills (e.g., cadence, calm, clarity, knowledge, ability to simplify, ability to foresee questions) = 💯 across the board. *Subscribing*

  • @D4rkenedskies
    @D4rkenedskies 5 років тому

    Why didn't I see you a year ago!? I failed that class, elective in my last year... Now working in m&a, I finally found you and understand... Thanks you, I'm just feeling stupid how I didn't understand it and failed the test...

  • @gourmayo
    @gourmayo 3 роки тому

    Very well done video. Clear and concise - great teacher

  • @jenifferhall6868
    @jenifferhall6868 11 років тому

    Marvelous video...Tim. Im looking forward to see the more details part of DCF.

  • @luisborges2048
    @luisborges2048 2 роки тому

    This is a greatly explained video.

  • @sathyajithmenon1384
    @sathyajithmenon1384 4 роки тому

    Fantastic explanation

  • @PapaPev
    @PapaPev 11 років тому +15

    Please could you do a weighted average cost of capital video? Specifically with a touch on finding component costs... Would make a good answer for the "how do you get the 10%" question.

  • @brendaong4053
    @brendaong4053 4 роки тому +4

    Very informative video. Investing with forex now should be at the top of every wise individual’s list.

    • @karimyakub7102
      @karimyakub7102 4 роки тому

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    • @jonmorrone4297
      @jonmorrone4297 4 роки тому

      @@karimyakub7102 yeah very true I Made around $3000 in forex trading investment with help of my reliable account manager

    • @karimyakub7102
      @karimyakub7102 4 роки тому

      @@jonmorrone4297 wow congratulation thats lovely to hear

    • @karimyakub7102
      @karimyakub7102 4 роки тому

      @@jonmorrone4297 tell me more about your investment manager and how long have you trade with him?

    • @jonmorrone4297
      @jonmorrone4297 4 роки тому

      @@karimyakub7102 Have been trading for a while on my own but i always find myself loosing , till i came across Mr Kluas Muller .
      He Assisted me in doing all my trades , and came back successful .
      He also taught me how to handle all my trades , now im able to trade by myself .
      I advice you to trade with him

  • @michaelmidzio1472
    @michaelmidzio1472 7 років тому +6

    To me this is just an introduction video on DCF mechanics, which does a good job. Discount rate (e.g. 10%) will be different per each company and will change over time. The riskier the company the higher the discount rate. And yes, DCF is built upon PV calculation. If you understand PV formula you will also understand DCF.

  • @millan112
    @millan112 11 років тому +1

    The DCF will help you calculate the market value of company assets. Goodwill is an asset so there is that connection.

  • @shalvsakhare2978
    @shalvsakhare2978 2 роки тому

    Thank you for the great lesson! Keep it up.

  • @borsenchannel8945
    @borsenchannel8945 4 роки тому

    Really very well explained. Thanks

  • @thisisbanerjee
    @thisisbanerjee 4 роки тому

    Excellently summed up! 👏🏻

  • @johnbandah2639
    @johnbandah2639 8 місяців тому

    let me cry first for failing my last exam 😭😭😭 finally I understand these the DCF. thanks for the great video

  • @nathaliehumstur7009
    @nathaliehumstur7009 4 місяці тому

    THANKS YOU SO MUCH! THIS HELPED ME A LOT! ❤️❤️❤️ IM A FIRST YEAR FINANCE STUDENT WISH ME LUCK!!!

  • @vascogamero530
    @vascogamero530 4 роки тому

    Excellent video.

  • @rowanellis8259
    @rowanellis8259 4 роки тому

    Incredible teaching! Thank you!

  • @maliquepapailler
    @maliquepapailler 6 років тому

    Great introductory for me, into learning about DCF. Thanks!

  • @williammazzacca8136
    @williammazzacca8136 2 роки тому

    Great videos. The explanation of DCF was the best I’ve seen including the way I learned it in college. Did you or will you do a video on CAPM? Thanks for the education. It’s very helpful.

  • @aaront1381
    @aaront1381 5 років тому

    Very nice video. Wished I found this earlier

  • @stalinnandwa4015
    @stalinnandwa4015 4 роки тому

    helpfull work out. this guy is just brilliant

  • @Financebymahsa
    @Financebymahsa Рік тому

    I have a DCF video with only 58 views it is so so so weird that I taught whatever I learnt in my workplace one thing that nobody would do it and ppl are ontetested in watching videos that will never make them an expert in finance!

  • @mikekazimowski9375
    @mikekazimowski9375 3 роки тому

    This guy is amazing!

  • @michalk7777
    @michalk7777 5 років тому

    I absolutelly love it! Thanks

  • @rajivvash8120
    @rajivvash8120 6 років тому

    Indeed - great video very well explained.

  • @Carrandas
    @Carrandas 5 років тому

    Great video, makes it easy to understand!

  • @lekanadenusi462
    @lekanadenusi462 2 роки тому

    Great video!

  • @oakinvestment5371
    @oakinvestment5371 4 роки тому

    I now know as much about how to value a company using DCF as I knew 10min 49sec ago..

  • @kamrana2805
    @kamrana2805 11 років тому

    Tim I was wondering, whats your opinion on pennystocks? Are pennystocks even taken seriously in the financial industry? If so, then can you give us some "insider secrets" to pennystocks; maybe do a video on it, or if you've already done the video then maybe you can direct me to it. Thanks. PS love your videos. Keep up the good work.

  • @mildundklar
    @mildundklar 7 років тому +3

    Excellent! You've helped me already with this superficial overview! Greetings from Germany!

  • @timelesstilenycpeterv4738
    @timelesstilenycpeterv4738 3 роки тому

    Bravo! Thank YOU SIR!

  • @TheExceptionalState
    @TheExceptionalState 5 років тому

    Great stuff. Thanks for the clarity

  • @gabrieldurantis3159
    @gabrieldurantis3159 9 років тому

    Great video Tim

  • @dereka8041
    @dereka8041 5 років тому

    Finance 101. Finished my M.B.A., back in 2012. We studied several business case studies, from the Harvard Business School. Maybe considering inflation would have helped too. Inflation runs around 1.8 percent.

  • @chandaniwerapitiya3697
    @chandaniwerapitiya3697 5 років тому

    Great presentation

  • @DewTime
    @DewTime 3 роки тому +4

    I immediately noticed that 90m at a rate of 10% does not add up to the original 100m. Should have rounded the 90.9 to 91.
    Anyway good video!

  • @Javssoccer
    @Javssoccer 5 років тому +3

    1:50 start

  • @iliyaremizov3679
    @iliyaremizov3679 3 роки тому +1

    Can you do a more thorough video about the DCF valuation method? getting into the how you determine the terminal value, the interest rate / WACC. thanks !

  • @aridiconsiglio
    @aridiconsiglio 2 роки тому

    great video but where should i get the interest rate from ?

  • @boratsmagadijev940
    @boratsmagadijev940 5 років тому

    Great work!

  • @042justin
    @042justin 4 роки тому +1

    Is there a video expanding upon this concept? Also, is the NPV in a DCF analysis like saying that instead of the company being worth 500 million, its actually worth 378 million? Moreover, are the cash values for every year Free Cash Flows??

  • @cuihe6992
    @cuihe6992 10 років тому

    Great videos! I was scratching head revising for corporate finance exam and still couldnt get my head around the evaluation approach. You are a star!

  • @rizywizy
    @rizywizy 8 років тому

    excellent explanation

  • @ThePrateek1989
    @ThePrateek1989 7 років тому

    Thank you. Nicely put.

  • @lukemcdonald674
    @lukemcdonald674 6 років тому

    Terrific video.. thank you.

  • @mullerstephan
    @mullerstephan 4 роки тому +2

    since interest rates are negative now is the money actually getting more worth in the future?

  • @hipolytos
    @hipolytos 2 місяці тому

    Great video

  • @ramenisgood4u
    @ramenisgood4u 11 років тому +1

    Thanks for another great video ! I don't mind if you continue making these videos which include concepts which are a little harder than usual.

  • @imicca
    @imicca 7 років тому

    love the British English! Always feels like the accent that any good teacher should use haha

  • @barryboots9369
    @barryboots9369 11 років тому +4

    Great Video! Keep it comin!!!

  • @morisot
    @morisot 11 років тому

    Hi Tim, great video. Just wonder can DCF model be applied in assessing REIT?

  • @samddouglass
    @samddouglass 11 років тому

    Hi Tim, thanks for the videos they are great. Would it be possible to get a video on making forecasts for revenue etc. themselves?