DCF Calculator
Determine the intrinsic value of any asset.
Projected Free Cash Flows
PV of Cash Flows
$0
PV of Terminal Value
$0
Total Enterprise Value
$0
About DCF Analysis
Discounted Cash Flow (DCF) analysis is a method of valuing a security, project, company, or asset using the concepts of the time value of money. All future cash flows are estimated and discounted by using cost of capital to give their present values (PVs).
The Methodology
- Forecast Period: Project free cash flows (FCF) for a specific period, usually 5-10 years.
- Terminal Value: Calculate the value of the asset at the end of the forecast period, assuming it grows at a constant rate forever (Gordon Growth Model).
- Discounting: Discount both the forecast period cash flows and the terminal value back to the present using the WACC.
FAQ
What is DCF?
Discounted Cash Flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future.
What is Terminal Value?
Terminal Value (TV) represents the value of a business or project beyond the forecast period when future cash flows can be estimated. It assumes the business will grow at a set growth rate forever.
Why does the discount rate matter?
The discount rate reflects the time value of money and the risk associated with the cash flows. A higher discount rate reduces the present value of future cash flows, leading to a lower valuation.
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