All the above examples apply a simple rate of return ... The discounted cash flow (DCF) formula takes projected future cash flows and reduces them for each year by applying a discount rate.

Many cash flow statements lay out these items for you, but knowing the formulas can give you a better appreciation of what goes into determining free cash flow. Low commission rates start at $0 ...

The formula to calculate the value ... The discount rate is by how much you discount a cash flow in the future. For example, the value of $1000 one year from now discounted at 10% is $909.09.

Here’s what you need to know about calculating free cash flow and other components of a cash flow statement: — Calculation of free cash flow. — Example of a free cash flow calculation.