DCF Calculator
Transparent, assumption-driven DCF inputs to estimate intrinsic value using cash flow, growth, risk, and time layers.
Assumptions
Enter core DCF assumptions first. Advanced analysis is optional and stays collapsed by default.
Initial Free Cash Flow (annual)
Cash the business generates today.
Expected Growth Rate
Reasonable near-term growth applied to the default forecast period.
Terminal Growth Rate
Long-run growth assumption (must be below the discount rate).
Required Return / Discount Rate
Higher = more conservative valuation.
Net Debt / Shares (optional)
Bridge enterprise value to equity value.
Estimate intrinsic value (not market price) and make uncertainty visible. This is an estimate, not a guarantee.
- Free Cash Flow–based DCF
- Equity-focused (company value → per-share if shares provided)
- Single-currency inferred from region (current: USD)
DCF Calculator
This Discounted Cash Flow (DCF) calculator estimates what a business or investment is worth today based on the cash it is expected to generate in the future. It converts future cash flows into present value by accounting for time and risk.
The calculator is intended for general users, investors, and salaried professionals who want a structured way to think about long-term value rather than short-term price movements. You can use it for companies, projects, or any asset with predictable cash flows.
Important clarification: the result is an estimate of intrinsic value based entirely on the assumptions you enter. It is not a market forecast and not a guarantee.
What Is Discounted Cash Flow?
Discounted Cash Flow is a valuation approach built on a simple idea: money received in the future is worth less than money received today, and uncertain cash flows should be valued more conservatively.
The method projects future cash flows over a period of time and then discounts them back to the present using a required rate of return. This rate reflects both time value of money and risk.
In simple terms, this answers: “If this asset generates these cash flows in the future, what are they worth today?”
Formula Used in This Calculator
The calculator uses the standard DCF structure:
- FCFt = Free cash flow in year t
- r = Discount rate (required return)
- t = Year number in the forecast period
- n = Total number of forecast years
The terminal value is calculated using the perpetual growth method:
- FCFn = Free cash flow in the final forecast year
- g = Long-term (terminal) growth rate
If cash, total debt, or shares outstanding are provided, the calculator bridges enterprise value to equity value and per-share value accordingly.
Worked Example
- Initial free cash flow: $100,000
- Expected growth rate: 6%
- Forecast period: 5 years
- Discount rate: 12%
- Terminal growth rate: 3%
- Project free cash flow for each of the next 5 years using 6% annual growth.
- Discount each year’s cash flow back to today at 12%.
- Calculate terminal value at the end of year 5 using the terminal growth formula.
- Discount the terminal value back to today.
- Add the discounted cash flows and discounted terminal value.
The total of these discounted values represents the estimated intrinsic value today.
What This Result Tells You
The output shows how your assumptions about growth, risk, and long-term sustainability translate into present value. It can help compare different scenarios, understand sensitivity to assumptions, and frame expectations about long-term returns.
The result does not indicate whether an asset is “good” or “bad.” It only reflects the logic of the inputs provided.
Limits & Boundaries
This calculator does not account for:
- Sudden changes in business conditions
- Cyclical or irregular cash flows
- Management decisions or competitive dynamics
- Taxes, transaction costs, or financing constraints
- Short-term market sentiment
Because of this, the output should be treated as a structured estimate, not a precise valuation.
Frequently Asked Questions
What does a DCF calculator actually calculate?▼
It estimates the present value of future cash flows after adjusting for time and risk using a discount rate.
Is discounted cash flow the same as market price?▼
No. Market price reflects current trading conditions, while discounted cash flow estimates intrinsic value based on assumptions.
Why does the discount rate affect the result so much?▼
Because the discount rate determines how strongly future cash flows are reduced when converted to today’s value.
What is free cash flow in a DCF calculation?▼
Free cash flow is the cash generated after operating expenses and required reinvestment, available to investors.
Why does terminal value matter in DCF?▼
Terminal value represents cash flows beyond the forecast period and often contributes a large portion of total value.
Can this DCF calculator be used in any country?▼
Yes. The calculation logic is universal, but growth and discount assumptions should reflect local economic conditions.
Does a higher DCF value mean the investment is attractive?▼
Not necessarily. A higher value may simply reflect more optimistic assumptions rather than lower risk.
Assumptions and Practical Considerations
DCF relies on long-term assumptions about growth and risk. Terminal growth should be conservative and realistic, and the discount rate should reflect uncertainty. Overly aggressive inputs can make results appear precise while being misleading.