Glossary · Reading the business
In short
A valuation method that estimates the value of an investment based on its projected future cash flows, discounted back to their present value. It helps you understand what future earnings are worth today.
While often used by sophisticated buyers or appraisers for complex businesses, DCF can be a powerful tool to complement other valuation methods like market multiples. It forces you to think critically about future performance and the risks associated with achieving those projections, directly impacting your business valuation.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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