Home › Investing & Real Estate › DCF Valuation Calculator
DCF Valuation Calculator
Projects free cash flow at a constant growth rate for a number of years, discounts each year and a Gordon-growth terminal value at the discount rate, and reports enterprise value, equity value (after net debt) and value per share.
When to use
You want an intrinsic value of a company or project from its current free cash flow, a growth assumption, a discount rate (e.g. WACC) and a terminal growth rate.
Do not use when: Cash flows are irregular or already listed year by year (use npv), the company has negative free cash flow, or you want the rate of return of known flows (use irr). Informational only; not financial advice.
Formula
FCF_t = current_free_cash_flow × (1 + g)^t; PV = Σ_{t=1..N} FCF_t / (1 + r)^t; TV = FCF_N × (1 + g_T) / (r − g_T); EV = PV + TV / (1 + r)^N; equity = EV − net_debt; per share = equity / shares_outstanding
Two-stage discounted cash flow with end-of-year flows and a Gordon-growth perpetuity for the terminal value; the result is only as good as the growth, discount-rate and terminal assumptions. Informational mathematics only; not financial advice.
Inputs
| Parameter | Type | Unit | Required | Description |
|---|---|---|---|---|
current_free_cash_flow | number | yes | Most recent annual free cash flow (year 0) in currency units. Range: > 0, ≤ 1000000000000000 | |
growth_rate_percent | number | % per year | yes | Annual growth of free cash flow during the projection period. Range: ≥ -50, ≤ 100 |
projection_years | integer | years | default 5 | Number of explicitly projected years before the terminal value. Range: ≥ 1, ≤ 20 |
discount_rate_percent | number | % per year | yes | Required return or WACC used to discount the cash flows. Range: > 0, ≤ 100 |
terminal_growth_percent | number | % per year | yes | Perpetual growth after the projection period; must be below the discount rate. Range: ≥ -10, ≤ 20 |
shares_outstanding | number | no | Optional share count for the value per share. Range: > 0, ≤ 10000000000000 | |
net_debt | number | default 0 | Debt minus cash, subtracted from enterprise value to get equity value (negative for net cash). Range: ≥ -1000000000000000, ≤ 1000000000000000 |
Outputs
| Output | Type | Unit | Description |
|---|---|---|---|
pv_of_cash_flows | number | Σ FCF_t / (1 + r)^t over the projection years. | |
terminal_value | number | FCF_N × (1 + g_terminal) / (r − g_terminal) at the end of year N. | |
pv_of_terminal_value | number | terminal_value / (1 + r)^N. | |
enterprise_value | number | pv_of_cash_flows + pv_of_terminal_value. | |
terminal_value_share_percent | number | % | pv_of_terminal_value / enterprise_value × 100 (high values mean the result depends mostly on the terminal assumptions). |
equity_value | number | enterprise_value − net_debt. | |
value_per_share | number | equity_value / shares_outstanding (only when shares are given). | |
cash_flows | list | One row per year: year, fcf, discount_factor, present_value. |
Example
FCF 100, 10 % growth, 5 years, 10 % discount, 2 % terminal: {"current_free_cash_flow":100,"growth_rate_percent":10,"projection_years":5,"discount_rate_percent":10,"terminal_growth_percent":2} → {"pv_of_cash_flows":500,"terminal_value":2053.4,"pv_of_terminal_value":1275,"enterprise_value":1775,"terminal_value_share_percent":71.83,"equity_value":1775}
FCF 5 M, 8 % growth, 10 years, 9 % discount, 2.5 % terminal, 2 M shares, net debt 10 M: {"current_free_cash_flow":5000000,"growth_rate_percent":8,"projection_years":10,"discount_rate_percent":9,"terminal_growth_percent":2.5,"shares_outstanding":2000000,"net_debt":10000000} → {"pv_of_cash_flows":47545244.93,"terminal_value":170222932.48,"pv_of_terminal_value":71904006.26,"enterprise_value":119449251.19,"equity_value":109449251.19,"value_per_share":54.72}
GET https://tttkmbb.com/api/v1/calculate/dcf-valuation?current_free_cash_flow=100&growth_rate_percent=10&projection_years=5&discount_rate_percent=10&terminal_growth_percent=2
Machine access
- API:
GET https://tttkmbb.com/api/v1/calculate/dcf-valuation(query parameters) orPOSTwith a JSON body{"inputs": {...}} - Schema: https://tttkmbb.com/api/v1/calculators/dcf-valuation · Markdown: https://tttkmbb.com/investing/dcf-valuation.md · JSON definition: https://tttkmbb.com/investing/dcf-valuation.json
- MCP: server
https://tttkmbb.com/mcp, toolrun_calculator with calculator_id="dcf-valuation" - OpenAPI operationId:
calculate_dcf_valuation - Freshness:
static. Authentication: none. Rate limit: fair use (see rate limits).
Sources
- Wikipedia – Discounted cash flow (reference)
- Wikipedia – Dividend discount model (reference)
FAQ
Why must the terminal growth rate be below the discount rate?
The Gordon formula TV = FCF × (1 + g)/(r − g) sums an infinite geometric series that only converges when g < r; a perpetual growth rate should also not exceed long-run economic growth.
What is the difference between enterprise value and equity value?
Enterprise value belongs to all capital providers; subtracting net debt (debt minus cash) leaves the value attributable to shareholders, which divided by the share count gives the per-share value.
Related calculators
- NPV Calculator — Discount an explicit list of cash flows instead of a growth projection.
- WACC Calculator — Derive the discount rate from the capital structure.
- Gordon Growth Model Calculator — The perpetuity formula used for the terminal value, applied to dividends.