Discounted Cash Flow (DCF) Calculator
Calculate the intrinsic value of investments using Discounted Cash Flow analysis. Estimate future cash flows, discount rates, and terminal values for accurate business valuation.
Step 1: Basic Inputs
About DCF Analysis
Discounted Cash Flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money.
Step 2: Advanced Inputs
Terminal Value
The terminal value represents the business value beyond the projection period, calculated using the Gordon Growth Model: TV = FCF × (1+g) ÷ (r-g).
DCF Valuation Results
Intrinsic Value Estimate
Discounted Cash Flow Projections
| Year | Cash Flow | Discount Factor | Present Value | Cumulative PV |
|---|---|---|---|---|
| Terminal Value | $1,850,000 | 0.3855 | $712,675 | |
| Total NPV | $1,250,000 |
Understanding the DCF Table
Each year’s cash flow is discounted back to present value using the formula: PV = CF ÷ (1+r)ⁿ, where r is the discount rate and n is the year number. The terminal value represents all cash flows beyond the projection period.
Sensitivity Analysis
DCF Valuation Formula
NPV = Σ [CFₜ ÷ (1+r)ᵗ] + [TV ÷ (1+r)ⁿ]
Where CFₜ is cash flow in year t, r is the discount rate, TV is terminal value, and n is the projection period. This formula accounts for the time value of money, making future cash flows less valuable than present ones.
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