Role of margins in the DCF valuation process?

Hi guys,

just wondering if someone could please explain the role of margins in the DCF valuation process. I've completed a few of Wall St Trainings self-study programs and the instructor calculates the margins for the historical years but no further. Other people in the industry though have mentioned as a passing comment that margins are one of the most important aspects used in the projection process.

If someone could explain their purpose I'd really appreciate it.

And forgive me if this is really obvious - I am only just getting my head around this stuff now.

Thanks a lot.