The video explains the discounted cash flow method. The idea of the method is that a company produces free cash flow, that could be given out to the share holders as dividends or could be invested into the company increasing its value further. But because this cash flow occurs in the future, it needs to be discounted to take this into account. Cash flow that occurs further in the future is less valuable than cash flow that occurs now. The value of the company is the sum of the discounted values of all its cash flows over years.