Discounting future cash flows is one of the most frequently used methods of business valuation.
It's also the preferred method of Warren Buffett and Charlie Munger.
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While he's never laid out his exact valuation process, Buffett has hinted that he uses the discounted cash flow method multiple times in the past.
For example, at Berkshire's 1993 meeting of shareholders, Buffett made the following statement regarding business valuation:
"Once you've estimated future cash inflows and outflows, what interest rate do you use to discount that number back to arrive at a present value? My own feeling is that the...
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