DCF vs YoY
DCF (Discounted Cash Flow) and YoY (Year over Year) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: DCF refers to discounted cash flow, while YoY refers to year over year — they describe different things even when they show up in the same sentence.
DCF — Discounted Cash Flow
A valuation method that estimates the present value of a business by forecasting its future cash flows and discounting them back to today.
YoY — Year over Year
A comparison of a metric in one period vs the same period one year ago. YoY strips out seasonality.
When to use DCF
Reach for "DCF" when the conversation is specifically about discounted cash flow. A valuation method that estimates the present value of a business by forecasting its future cash flows and discounting them back to today.
When to use YoY
Reach for "YoY" when the conversation is specifically about year over year. A comparison of a metric in one period vs the same period one year ago. YoY strips out seasonality.
FAQs
What is the difference between DCF and YoY?
DCF stands for Discounted Cash Flow — A valuation method that estimates the present value of a business by forecasting its future cash flows and discounting them back to today. YoY stands for Year over Year — A comparison of a metric in one period vs the same period one year ago. YoY strips out seasonality.
Are DCF and YoY the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. DCF = Discounted Cash Flow. YoY = Year over Year.
When should I use DCF vs YoY?
Use DCF when you're specifically referring to discounted cash flow. Use YoY when the topic is year over year.