How does Trefis use DCF analysis?
In order to project the Revenue, Direct Cost and Indirect Cost line items necessary to determine future free cash flows for use in DCF analysis, the Trefis team comes up with forecasts for each of the essential drivers of value for the divisions of a company. See “How does Trefis come up with its forecasts?” for more on our forecasts. Trefis forecasts seven years into the future and applies a terminal growth rate to each division’s cash profits in year seven to determine the value coming from the remaining years. See Advanced within the Finance help section for more details.
