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Discounted Cash Flow Calculator

Make use of this calculator to calculate the discounted cash flow using the FCFF and EPS methods.

DCF Method:

DCF Using FCFF

FCFF 1

FCFF 2

Cash

Net Debt

Outstanding Debt

Growth And Discount Rate

WACC

Perpetual Growth

Outstanding Shares

Shares And Its Market Value

DCF using EPS

Share Price

Discount Rate

Earnings Per Share

Growth Rate

Predictable Growth

Over The Next...

Predictable Growth

Terminal Growth Rate

Terminal Growth

Over The Next...

Predictable Growth

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Discounted Cash Flow (DCF) Calculator

The Discounted Cash Flow calculator helps estimate the present value of future cash flows for businesses, investments, or assets. It is especially useful when future conditions are uncertain or growth is slow, allowing investors to make informed decisions.

What Is Discounted Cash Flow?

“DCF (Discounted Cash Flow) is a method used to evaluate an investment by analyzing its expected future cash flows.”

DCF helps determine the attractiveness of an investment by considering projected future cash inflows and comparing them to the required rate of return, typically ranging from 10% to 20%.

DCF Formula

The discounted cash flow formula sums the present value of cash flows across multiple periods:

$DCF = \frac{CF_1}{(1+r)^1} + \frac{CF_2}{(1+r)^2} + \frac{CF_3}{(1+r)^3} + \ldots + \frac{CF_n}{(1+r)^n}$

Where:

$CF_1, CF_2, CF_3, \ldots, CF_n$ = Expected cash flows at different time periods (Year 1, Year 2, ...)
$r$ = Discount rate (investor’s required rate of return or cost of capital)

How to Calculate DCF

Estimate the future cash flows of the investment and discount each amount back to its present value using the formula above. An online DCF calculator can simplify this process.

Practical Example

Suppose an investment projects the following annual cash flows:

Year 1: $100,000
Year 2: $120,000
Year 3: $150,000

Assume a discount rate of 15%. Calculate DCF as follows:

Step 1: Apply the formula

$DCF = \frac{CF_1}{(1+r)^1} + \frac{CF_2}{(1+r)^2} + \frac{CF_3}{(1+r)^3}$

Step 2: Substitute values

$DCF = \frac{100,000}{(1+0.15)^1} + \frac{120,000}{(1+0.15)^2} + \frac{150,000}{(1+0.15)^3}$

Step 3: Compute present value of each year

Year 1: 100,000 / 1.15 = $86,956.52
Year 2: 120,000 / (1.15)^2 = $90,702.95
Year 3: 150,000 / (1.15)^3 = $98,267.72

Step 4: Sum the values

DCF ≈ $86,956.52 + $90,702.95 + $98,267.72 ≈ $275,927.19

This indicates the present value of the investment based on a 15% discount rate.

Using the DCF Calculator

Select the DCF method
Input expected cash flows and discount rate
Click calculate

Calculator Outputs

Growth value
Terminal value
Total intrinsic value
Firm value
Equity value
Fair value per share
Percentage overvaluation or undervaluation

Additional Information

Is DCF the Same as NPV?

No, although related. DCF calculates the present value of future cash flows to assess investment attractiveness. NPV measures the difference between present value of inflows and outflows.

What Is the Growth Stage in DCF?

The growth stage refers to the period when a company experiences rapid expansion in revenue, profits, or market share, usually after the initial setup phase.

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