Discounted Cash Flow Calculator

About this tool

An interactive Discounted Cash Flow (DCF) calculator that estimates the present value of a business or asset from projected future free cash flows. Inputs include the starting free cash flow, a series of growth rates over the explicit projection horizon, the discount rate (typically the weighted average cost of capital), and a terminal value. Multiple terminal-value methods are available — Gordon Growth (default), Exit Multiple, No Growth Perpetuity, H-Model (two-stage), and Convergence.

Educational tool only — not financial advice. Do your own research before making any decision.

The DCF formula

Enterprise value is the sum of discounted projected free cash flows plus the discounted terminal value:

EV = Σ ( CF_t / (1 + r)^t ) + TV / (1 + r)ⁿ

where CF_t is the free cash flow in year t, r is the discount rate (WACC), t is the time period, n is the final explicit projection year, and TV is the terminal value. The default terminal-value computation is the Gordon Growth model: TV = CF_n+1 / (r - g), where g is the long-term steady-state growth rate (which must be below r). Alternative methods are also available — Exit Multiple, No Growth Perpetuity, H-Model, and Convergence.

Key inputs

• Free cash flow (FCF) — the cash the business generates after capital expenditures needed to maintain or expand operations: FCF = Operating Cash Flow − CapEx.
• Growth rates — a year-by-year schedule across the explicit projection horizon, configurable via sliders.
• Discount rate (WACC) — the weighted cost of equity and debt capital; reflects the time value of money and the riskiness of the cash flows.
• Terminal growth — the perpetuity growth rate beyond the explicit horizon. Must be lower than the discount rate and is usually anchored near long-run GDP growth.
• Number of shares — used to convert enterprise value to intrinsic value per share.

How to read the output

The calculator returns a set of visualisations — the projected free cash flow path, the implied growth-rate schedule, a value waterfall, and an optional Monte Carlo summary chart — together with the discounted cash flow per year, the terminal value, the sum-of-parts enterprise value, and an implied value per share (enterprise value divided by outstanding shares, without an explicit net-debt or cash adjustment). Results are sensitive to assumptions: small changes in the discount rate or terminal growth can move the result materially. Where possible the terminal value should not dominate the enterprise value, and the projection horizon should be long enough that steady-state assumptions are credible.

Strengths and limitations

DCF is grounded in cash generation rather than market sentiment, forces explicit modelling of growth and reinvestment, and makes assumptions inspectable. It is also sensitive to those same assumptions, struggles with highly unpredictable businesses, and can be dominated by the terminal value when the projection horizon is short. Treat the output as a range, not a point estimate.

Disclaimer

This calculator is an educational and mathematical tool only. It is not financial advice, not a recommendation, and not a solicitation. Results are illustrative and depend on the assumptions provided. Past performance does not guarantee future results. Do your own research and consult an independent qualified professional before making any decision.