Discounted Cash Flow Calculator · DCF Valuation

Discounted Cash Flow Calculator

Value a business or investment · Project free cash flows · Terminal value · Enterprise & equity value.

Currency
DCF Assumptions
%
%
Formula: Enterprise Value = Σ [FCFt ÷ (1 + r)t] + Terminal Value ÷ (1 + r)n  ·  Terminal Value = FCFn × (1 + g) ÷ (r − g)
Projected Free Cash Flows (up to 15 years)
Tip: Enter free cash flow (FCF) for each forecast year. FCF = operating cash flow − capital expenditures. Additional year fields appear automatically as you type.
Equity Adjustment (Optional)
$
shares
$
Leave Net Debt at 0 to just see Enterprise Value. Enter shares outstanding to convert Equity Value into an intrinsic value per share and compare it to the market price.
DCF Valuation
📊 Valuation Ready
Enterprise Value: —
Enter cash flows to calculate the DCF value.
🏢 Enterprise Value
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📊 Equity Value
—
💵 Value per Share
—
📈 Upside / Downside
—
PV of Forecast FCFs
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PV of Terminal Value
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Terminal Value
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TV % of EV
—
Where Enterprise Value Comes From
💡 Interpretation
Enter your projected cash flows and assumptions to calculate the DCF valuation.
Discounted Cash Flow Analysis
YearFCFDiscount FactorPresent Value% of EV

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Faiq Ur Rahman

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Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.

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A discounted cash flow analysis answers a fundamental question: what is a future stream of cash worth today? Business owners, investors, and analysts use it to test whether a project, property, or company is priced fairly. This calculator keeps the model transparent: every input is visible, every formula is shown, and every result is broken into forecast value and terminal value. Because the math runs entirely in your browser, you can explore scenarios without sharing sensitive financial data. It is a practical first-pass valuation tool, not a replacement for professional due diligence.

 

How to Use the Discounted Cash Flow Calculator

  1. Pick your currency from the dropdown. This changes symbols only; no conversion happens.

  2. Set the discount rate as a percentage. This represents your required return or WACC.

  3. Enter the terminal growth rate. Keep it below the discount rate for a valid terminal value.

  4. Type free cash flow for Year 1. Positive numbers mean cash coming in; negative numbers mean cash going out.

  5. Continue adding annual cash flows. New year fields appear automatically as you fill the last visible year.

  6. Optionally enter net debt and shares outstanding to convert enterprise value into equity value per share.

  7. Add a current market price if you want to see upside or downside.

  8. Review the result cards, composition bar, and DCF table to understand what drives the valuation.

 

How the Discounted Cash Flow Calculator Formula Works

The calculator builds a standard DCF model. Each forecast year’s free cash flow is discounted by a factor of 1 ÷ (1 + r)^t, where r is the discount rate and t is the year number. The sum of those present values is the PV of forecast FCFs.

A terminal value captures all cash flows beyond the forecast period. This tool uses the Gordon Growth Model:

Formula: Terminal Value = Final Year FCF × (1 + g) ÷ (r − g)

Here g is the perpetual growth rate. The terminal value is then discounted back to today:

Formula: PV of Terminal Value = Terminal Value ÷ (1 + r)^n

Enterprise Value is the sum of the two present values:

Formula: Enterprise Value = PV of Forecast FCFs + PV of Terminal Value

If you enter net debt, the calculator subtracts it to find equity value:

Formula: Equity Value = Enterprise Value − Net Debt

Finally, if shares outstanding are provided, value per share is equity value divided by shares. The model requires r > g and a positive final-year cash flow for the terminal value to be valid. If not, the tool flags an invalid terminal value and shows a warning.

 

Worked Example

Suppose you are valuing a SaaS business. You enter five years of free cash flows: $8,000, $12,000, $18,000, $26,000, and $36,000. The discount rate is 12%, and terminal growth is 4%.

The present value of each forecast year is calculated using the discount factor. Summing those gives roughly $66,472. The final year FCF is $36,000, so the terminal value is $36,000 × 1.04 ÷ (0.12 − 0.04) = $468,000. Discounted back five years, that terminal value is worth about $265,556 today. Enterprise value is therefore approximately $332,028. Terminal value makes up about 80% of that total.

If you also entered $0 net debt and 100,000 shares, equity value would be $332,028, or $3.32 per share. A market price of $2.50 would imply an upside of roughly 32.8%, suggesting the stock may be undervalued under these assumptions.

Frequently Asked Questions

What is a discounted cash flow calculator?

A discounted cash flow calculator estimates the present value of an investment by projecting future free cash flows and discounting them at a required rate of return. It outputs enterprise value, and optionally equity value and value per share.

 

How is DCF different from NPV?

Net present value usually applies a known discount rate to a series of cash flows. DCF is the broader valuation framework that includes forecasting cash flows and estimating a terminal value. In practice, a DCF model calculates an NPV for the forecast period plus the present value of terminal value.

 

What discount rate should I use in a DCF calculator?

The discount rate should reflect the risk of the cash flows. Stable companies often use 7–10%, growth companies 10–15%, and startups 25% or more. Many analysts use WACC, the weighted average cost of capital, as the discount rate.

 

Why does the calculator say “Invalid Terminal Value”?

That message appears when the discount rate is less than or equal to the terminal growth rate. The Gordon Growth Model requires r > g. If r ≤ g, the terminal value formula breaks down, so you need to lower the growth rate or raise the discount rate.

 

What is terminal value in a DCF?

Terminal value estimates the value of all cash flows beyond the explicit forecast period. This calculator uses the Gordon Growth Model, which assumes cash flows grow at a constant rate forever. Terminal value often represents a large share of total enterprise value.

 

How do I know if my DCF valuation is reliable?

Check the terminal value percentage. If it is above 85% of enterprise value, your valuation depends heavily on long-term assumptions. A balanced DCF usually has terminal value between 50% and 80%. Also sanity-check your discount rate and growth rate against industry norms.

 

Can I use this DCF calculator for a startup?

Yes, but startups often have negative cash flows in early years. The calculator supports negative values. However, terminal value requires a positive final-year cash flow, so you may need to extend the forecast until the business turns cash-flow positive.

 

What is the difference between enterprise value and equity value?

Enterprise value represents the total value of the business, including debt and excluding cash. Equity value is what remains for shareholders after subtracting net debt. This calculator computes enterprise value first, then subtracts net debt to get equity value.

 

Does changing the currency affect the DCF result?

No. The currency selector changes the displayed symbol only. It does not convert cash flows or alter the mathematical result. If you need to compare across currencies, convert all inputs to a single currency before entering them.

 

How many years of cash flows can I enter?

You can enter up to 15 annual free cash flows. Additional year fields appear automatically as you type into the last visible year.

 

Why is my DCF value negative?

A negative enterprise value can occur if forecast cash flows are negative or if the terminal value is invalid. Check that your final-year cash flow is positive and that the discount rate exceeds the terminal growth rate.

Financial Disclaimer

This Discounted Cash Flow Calculator is for educational and informational purposes only. It does not provide investment, financial, tax, or legal advice. DCF valuations are highly sensitive to assumptions and should be used alongside other analysis. Consult a qualified financial professional before making investment decisions.

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