Discounted Cash Flow (DCF) is an evaluation method used to estimate the value of an investment based on its expected future cash flow. DCF analysis tries to figure out the value of an investment today based on estimates of how much money it will make in the future.

This applies to decisions made by investors in companies or securities, such as acquiring a company, investing in a technology startup, or buying a stock, and for business owners and managers who want to decide on capital budgets or operating expenses, such as opening a new factory or purchasing new equipment or Leased.