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DCF Calculator

Estimate what a business or stock is worth from the cash it can generate. Enter free cash flow, a growth rate (one or two stages), a terminal growth rate and a discount rate to get the projected cash flows, terminal value, enterprise and equity value and intrinsic value per share.

Last updated:

Cash flow & growth
$

Operating cash flow − capital expenditures, last 12 months.

years
% / yr
years

Used only if a second growth rate is entered.

% / yr
%

Long-run growth forever; usually 2%–3%.

Discounting & per-share value
%
$

Negative if the company holds net cash.

$
Enter your values to see the result.
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How to use the DCF Calculator

  1. Enter the current annual free cash flow (operating cash flow minus capital expenditures).
  2. Set the growth rate and the number of projection years; add a second, lower rate for later years if you want a two-stage model.
  3. Choose the terminal growth rate (long-run, usually near inflation) and the discount rate, such as the company's WACC.
  4. Add net debt and shares outstanding, plus today's share price to compare.
  5. Read the intrinsic value per share and check the sensitivity table to see how much it depends on your assumptions.

DCF formulas

  • Projected FCF: FCFt = FCFt−1 × (1 + g)
  • Present value: PVt = FCFt ÷ (1 + r)t
  • Terminal value: TV = FCFN × (1 + gT) ÷ (r − gT), discounted by (1 + r)N
  • Enterprise value = Σ PVt + PV(TV)
  • Equity value = enterprise value − net debt; value per share = equity value ÷ shares outstanding

Example: FCF of $100 growing 5% a year for 5 years, r = 10%, gT = 2%. Year-5 FCF is $127.63, the PVs add up to $435.81, TV = 127.63 × 1.02 ÷ 0.08 = $1,627.26 with a PV of $1,010.40, so the enterprise value is about $1,446.21.

Discount factors 1 ÷ (1 + r)t

Year6%8%10%12%15%
10.94340.92590.90910.89290.8696
30.83960.79380.75130.71180.6575
50.74730.68060.62090.56740.4972
100.55840.46320.38550.32200.2472
150.41730.31520.23940.18270.1229
200.31180.21450.14860.10370.0611

Frequently asked questions

What is a DCF valuation?

A discounted cash flow valuation says a business is worth the present value of all the free cash flow it will produce. Future cash flows are projected and then discounted back to today at a rate that reflects risk and the time value of money.

How is the terminal value calculated?

This calculator uses the Gordon growth (perpetuity) method: TV = FCF in the final projected year × (1 + terminal growth) ÷ (discount rate − terminal growth). The terminal value is then discounted back to today like the other cash flows.

What discount rate should I use?

For a company valuation the weighted average cost of capital (WACC) is standard, often somewhere around 7% to 10% for large established companies and higher for small or risky ones. Investors also use their own required rate of return. A higher rate gives a lower value.

Why must the terminal growth rate be below the discount rate?

The perpetuity formula divides by (discount rate − growth). If growth equals or exceeds the discount rate, the value becomes infinite or negative, which is not meaningful. Long-run growth is usually set near long-term inflation or GDP growth, around 2% to 3%.

Why subtract net debt?

Discounting free cash flow to the firm gives the enterprise value, which belongs to both lenders and shareholders. Subtracting debt and adding back cash (net debt) leaves the equity value that belongs to shareholders, which is then divided by shares outstanding.

Why is the terminal value such a large part of the result?

In most DCF models the terminal value is 50% to 80% of the total, because it covers every year after the projection period. That is why small changes to the discount rate or terminal growth move the value a lot, and why the sensitivity table is worth checking.

Is the intrinsic value a price target?

No. A DCF is only as good as its assumptions, and it is an estimate, not a forecast or financial advice. Use it to understand what growth and returns the current price implies.

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

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