DCF Calculator

Calculate the intrinsic value of investments using Discounted Cash Flow analysis. Evaluate present value of future cash flows with professional-grade financial modeling.

✓ Investment Valuation ✓ Cash Flow Analysis ✓ Terminal Value

DCF Analysis Parameters

Cash Flow Projections

Year 1 expected cash flow

Annual cash flow growth

Explicit forecast period

Required rate of return (WACC)

Terminal Value Parameters

Long-term growth rate

Exit multiple (0 for growth model)

Additional Parameters

Corporate tax rate

Additional risk adjustment

DCF Formula

PV = Σ CF/(1+r)^t + TV/(1+r)^n
Where:
PV = Present Value
CF = Cash Flow
r = Discount Rate
t = Time Period
TV = Terminal Value

Valuation Examples

Mature Business
$500k CF, 3% growth, 8% discount
Growth Company
$200k CF, 15% growth, 12% discount
Startup Valuation
$50k CF, 25% growth, 20% discount

DCF Components

✓ Free Cash Flow projections
✓ Terminal value calculation
✓ Discount rate (WACC/Required return)
✓ Present value summation
✓ Sensitivity analysis

Terminal Value Methods

Gordon Growth Model: CF×(1+g)/(r-g)
Exit Multiple: CF × Multiple
Liquidation Value: Asset Value

Typical Discount Rates

Large Cap Stocks: 8-12%
Small Cap Stocks: 12-18%
Private Equity: 15-25%
Venture Capital: 20-40%
Real Estate: 6-10%
Advertisement

Understanding DCF Analysis

Discounted Cash Flow (DCF) analysis is a valuation method that estimates the value of an investment based on its expected future cash flows.

  • Time Value of Money: Future cash flows are worth less than present cash flows
  • Intrinsic Value: Calculates the fundamental value of an investment
  • Forward-Looking: Based on future performance projections
  • Risk Adjustment: Higher discount rates for riskier investments

DCF Best Practices

Conservative Assumptions

Use realistic growth rates and conservative cash flow projections to avoid overvaluation.

Sensitivity Analysis

Test different scenarios with varying growth rates and discount rates to understand value ranges.

Terminal Value Focus

Terminal value often represents 60-80% of total value, so choose terminal assumptions carefully.

Multiple Methods

Compare DCF results with comparable company analysis and precedent transactions.