Intrinsic value

The value of any asset is the present value of the cash it will produce. Everything else in a valuation is machinery for that sentence.

• Valuation
• Investing

2 ideas that carry it

• FrameworkValuationVideo located

  A DCF is machinery for one sentence: value is the present value of expected cash flows

  Every cell in a DCF is a claim about future cash or about its risk; if you cannot say which, the cell should not be there.

  The first DCF question in any interview, and whenever a model has grown so large that nobody can say what it is for.

  From Session 3: Intrinsic and DCF Valuation — Laying the Groundwork · Aswath Damodaran (NYU Stern)

• FrameworkValuationBook

  Every forecast row is a sentence about the business

  A forecast is a story written in numbers; if a row cannot be said as a sentence about the business, it should not be in the model.

  Building or defending a DCF, writing a stock pitch, or reviewing someone else's model.

  From Narrative and Numbers · Aswath Damodaran