— Business & Valuation
DCF Calculator
Value a business from projected free cash flows, terminal value, and WACC. Forecast growth, discount cash flows to today, bridge enterprise value to equity value per share, and test sensitivity to discount rate and terminal growth.
Intrinsic value per share
$17
- Enterprise value
- $1,866,667
- Equity value
- $1,666,667
- PV of forecast FCFs
- $500,000
- PV of terminal value
- $1,366,667
- Terminal value as % of EV
- 73.21%
- Value per share
- $17
Try: Steady 10% grower, Two-stage high growth, Exit-multiple terminal, With a market price
— The DCF schedule
| Year | Free cash flow | Growth % | Discount factor | PV of FCF |
|---|---|---|---|---|
| 1 | $110,000 | 10% | 0.909 | $100,000 |
| 2 | $121,000 | 10% | 0.826 | $100,000 |
| 3 | $133,100 | 10% | 0.751 | $100,000 |
| 4 | $146,410 | 10% | 0.683 | $100,000 |
| 5 | $161,051 | 10% | 0.621 | $100,000 |
| Terminal | $2,201,030 | 2.5% | 0.621 | $1,366,667 |
| Enterprise value | $1,866,667 |
— Sensitivity — per-share value (WACC across, terminal growth down)
| Term g \ WACC | 8% | 9% | 10% | 11% | 12% |
|---|---|---|---|---|---|
| 1.5% | $20 | $17 | $15 | $13 | $12 |
| 2% | $22 | $18 | $16 | $14 | $12 |
| 2.5% | $24 | $20 | $17 | $14 | $13 |
| 3% | $26 | $21 | $18 | $15 | $13 |
| 3.5% | $28 | $23 | $19 | $16 | $14 |
— How the value is built
Download— How it works
Enterprise value = Σ FCFₜ ÷ (1 + WACC)ᵗ + terminal value ÷ (1 + WACC)ⁿ. Equity value = EV − net debt − minority − preferred + investments. Per share = equity ÷ diluted shares. Terminal value = FCFₙ(1+g) ÷ (WACC − g), or terminal EBITDA × an exit multiple.
What a DCF actually does
A business is worth the cash it will hand its owners, and a DCF makes that literal: forecast the free cash flow for a few years, estimate a terminal value for everything after, and discount it all back to today at the WACC — because cash next decade is worth less than cash next year. Sum the present values and you have the enterprise value; subtract net debt and the other claims and you have the equity value; divide by the diluted share count and you have an intrinsic value per share to set against the market price. Enter a single growth rate to generate the forecast, or switch to a two- or three-stage path for a company growing fast now and slower later.
Worked example — $100k base FCF, 10% growth, 5 years, 10% WACC, 2.5% terminal growth: The five discounted flows sum to $500k; the terminal value adds about $1.37M of present value. Enterprise value ≈ $1.87M; less $200k net debt that’s $1.67M of equity, or about $16.70 a share on 100k shares.
The terminal-value credibility check
Here is the dirty secret of every DCF: most of the answer usually sits in the terminal value — the single lump standing in for every year beyond your forecast. That’s normal, but it means your assumptions about long-run growth and the discount rate dominate the result, and small changes to either move the value a lot. So the calculator reports the terminal value as a percentage of enterprise value and flags it when it climbs above three-quarters: at that point the valuation rests less on the cash flows you actually modelled than on a perpetuity assumption, and deserves real scepticism. It also computes both terminal methods — Gordon growth and an exit multiple — side by side, so each cross-checks the other rather than being taken on faith.
Sensitivity is the real output
Because a DCF is so sensitive to two assumptions, the single point estimate is the least interesting thing it produces — the sensitivity matrix is the real output, and the one analysts screenshot into decks. The grid recomputes the value across a range of WACCs (along the top) and terminal growth rates or exit multiples (down the side), so you see the whole landscape: a value that holds steady across the grid is robust, while one that swings wildly is telling you the model is fragile and the inputs need more care. The value-bridge waterfall tells the story the other way — each forecast year’s present value stacking up, the terminal value on top, summing to enterprise value, then stepping down by net debt to equity. Mid-year discounting and a full equity bridge (minority, preferred, investments) are there when you need banking-grade precision. Not investment advice — a model is only as good as its assumptions.
— Reader questions
What discount rate should I use in a DCF?
Usually the weighted average cost of capital (WACC) — the blended after-tax cost of the company’s debt and equity. Higher business or financial risk means a higher WACC and a lower value. If you only have a cost of equity, that’s a reasonable proxy for an all-equity firm.
Why is the terminal value so large?
It captures every year of cash flow after your explicit forecast, compressed into one figure — so it’s normally the biggest part of the value. That’s expected, but it also means the result leans heavily on long-run growth and discount-rate assumptions. This calculator shows the terminal value as a share of enterprise value and warns when it exceeds 75%.
Gordon growth or exit multiple for the terminal value?
Gordon growth (a perpetuity at a stable rate) is the academic standard; an exit multiple (a multiple of terminal EBITDA) reflects what an acquirer might pay and is common in banking. Neither is “right” — the calculator computes both and shows the spread, which is the honest way to use them: as a cross-check on each other.
What is the mid-year convention?
A refinement that discounts each year’s cash flow as if it arrives in the middle of the year (at t − 0.5) rather than the end, since cash actually flows throughout the year. It’s standard in investment banking and lifts the valuation slightly. Toggle it on for banking-grade output.
How do I go from enterprise value to value per share?
Subtract net debt (and minority interest and preferred equity, add back non-operating investments) to get equity value, then divide by the diluted share count. This calculator shows the full bridge and the per-share figure, with upside/downside if you enter the market price.