Advantages The alternatives to DCF are relative valuation measures, which use multiples to compare stocks within a sector.
{"Image DocumentName": "DCF Analysis: Pros & Cons Of DCF:", "Image ImageDescription": "Advantages The alternatives to DCF are relative valuation measures, which use multiples to compare stocks within a sector. While relative valuation metrics such as price-earnings (P/E), EV/EBITDA and price-to-sales ratios are fairly simple to calculate, they aren t very useful if an entire sector or market is over or undervalued. Unlike standard valuation tools such as the P/E ratio, DCF relies on free cash flows. For the most part, free cash flow is a trustworthy measure that cuts through much of the arbitrariness and guesstimates involved in reported earnings.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}