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Estimate a company’s intrinsic value using discounted cash flow analysis, projected free cash flows, terminal value, discount rate assumptions and optional value per share comparison.
A discounted cash flow model estimates future free cash flow, reduces each year's amount to its value today, adds a terminal value, then adjusts for debt, cash and share count. A common terminal value formula divides next year's cash flow by the discount rate minus the long term growth rate. If current cash flow is $100 million, growth is 2% and the discount rate is 9%, the terminal value is about $1.46 billion. Terminal value often makes up a large share of the answer, so test different inputs. A DCF is a reasoned estimate about the future, not proof of fair value.
Estimate a company’s intrinsic value based on future cash flows
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Enter your inputs and click Calculate Intrinsic Value to see a personalized valuation insight.
General education only — check the assumptions before using the result.
Purpose: This calculator is a general educational tool that performs a numerical calculation from the values you enter. It does not recommend, advertise or promote a specific financial product.
Assumptions: The calculation uses the input values and assumptions displayed in the calculator. Default values are illustrative starting points, not forecasts. Change each non-statutory assumption so it matches the scenario you want to test.
Limitations: Actual market returns, prices, dividends, interest rates, fees, tax, inflation and timing may differ from the assumptions. The calculator may omit factors relevant to you. Small input changes can materially change the result, so the output is an illustration rather than a prediction.
This financial calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. You should consider obtaining advice from a financial services licensee before making any financial decisions.
You can print this page or save it electronically using your browser controls. See ASIC Instrument 2026/41 for the conditions applying to generic financial calculators.
Disclaimer · Terms of Use
Educational content only. DCF outputs are estimates based on your assumptions. They do not account for debt, off-balance-sheet liabilities, market sentiment, or qualitative factors. This tool is not financial advice.
A company with $10M revenue, 10% growth, 20% EBITDA margin, 10% discount rate and 2.5% terminal growth has a DCF intrinsic value of about $20.83M, with 42% from projected cash flows and 58% from terminal value. DCF is the foundational valuation method in finance; it asks what a stream of future cash flows is worth today after discounting for time and risk.
Inputs to intrinsic value in three steps.
Current annual revenue, expected growth rate, EBITDA margin. These drive projected cash flows.
Corporate tax rate, capex as % of revenue, working capital change as % of revenue. These convert EBITDA to free cash flow.
The result panel shows DCF Intrinsic Value Estimate, Enterprise Value, PV of Cash Flows, Terminal Value, and a year-by-year cash flow table. If terminal value contributes more than 75% of total, the projection leans heavily on assumptions — tighten growth and discount rate inputs before trusting the number.
A four-stage written walkthrough — the chapters a video would cover, available now in text.
Four chapters covering inputs, outputs and the common mistakes to avoid.
5 min watch. Auto captions available. Walkthrough chapters listed above.
Specific outcomes, not generic claims.
Stop relying purely on market multiples. DCF builds a value from the fundamental cash generation of the business.
Change one assumption at a time to see how much it moves the answer. DCF outputs are extremely sensitive to terminal growth and discount rate.
Optional per share calculation lets you compare DCF value to current share price. Large gaps suggest market or model is wrong.
Most calculators hide the formula. We show it because understanding the math is the point.
Two parts: present value of explicit projection period free cash flows, plus present value of terminal value beyond that.
FCF
WACC
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Terminal Value
The projection is a mathematical model, not a forecast. Six assumptions baked into the math, plus what real outcomes look like.
Each card pairs an assumption the calculator makes with what real world investing actually looks like.
Reality: Real growth is lumpy. The smooth projection misses cyclical and disruption effects.
Reality: WACC changes with interest rates, leverage and business risk. Real WACC moves over time.
Reality: TV often dominates the result; small changes in terminal growth materially change the answer.
Reality: DCF assumes the business continues operating with current economics. Disruption or competition can invalidate the model.
Reality: Real earnings to cash conversion depends on working capital management, capex timing and accounting choices.
Reality: Tax rates change with jurisdiction, structure and law. Future tax burden is uncertain.
Same base scenario, one variable changed at a time. The projection is highly sensitive to small changes.
The calculator assumes a smooth return every year. Here is how that compares to verified historical data.
Written by Dr. Charles Lo, Associate Professor, CPA. Reviewed annually.
Discounted cash flow valuation asks a single question: what is a stream of future cash flows worth today, given the time value of money and the riskiness of those cash flows? The math has two components: present value of explicitly projected cash flows for some period, plus a terminal value capturing everything beyond.
Free cash flow is the cash available to all capital providers after the business reinvests for growth. The standard calculation starts with EBITDA, deducts taxes on operating income, subtracts capital expenditure, and adjusts for working capital changes. This is the cash flow that gets discounted.
Terminal value is the present value of all cash flows beyond the explicit projection. The standard Gordon Growth formula assumes a constant perpetual growth rate. Terminal value typically dominates DCF results, often accounting for 50 to 80% of the total value. This is why terminal assumptions matter most.
Use a discount rate that reflects the business risk. For mature large cap companies, 8 to 10% is defensible. For higher risk small or growth companies, 12 to 15%. For stable utility like businesses, 6 to 8%.
Terminal growth rate should never exceed long run nominal GDP growth (typically 4 to 5%). Most analysts use 2 to 3% to reflect a mature business growing roughly with inflation.
Read the split between projected FCF and terminal value. If terminal value exceeds 70% of total, the DCF is mostly capturing what happens after the explicit period; treat the result with extra caution.
Compare your DCF value to current market price. A small gap is normal; a 50%+ gap usually means either your assumptions are off or the market is.
Real numbers calculated from the same formula as the live tool. Every figure below is verified, not approximated.
$10M revenue, 10% growth, 20% EBITDA margin, 10% WACC, 2.5% terminal, 10 year projection
A mid sized software business with moderate growth and stable margins.
Same business but 15% revenue growth instead of 10%
Testing how growth assumption changes the valuation.
Same business with 8% WACC instead of 10%
What happens when interest rates fall or the business is judged less risky.
Same business with 3.5% terminal growth instead of 2.5%
Testing terminal growth sensitivity in this 10 year projection.
$20.83M EV, $5M net debt, 1M shares outstanding
Converting enterprise value to equity value per share.
The questions users most often ask about calculator output.
Yes. Free to use, no signup. Your inputs are not stored or shared.
Mature large cap: 8 to 10%. Mid cap or higher risk: 10 to 12%. Small cap or growth: 12 to 15%. Stable utility: 6 to 8%. Use weighted average cost of capital when you can calculate it.
2 to 3% for most businesses (roughly inflation). Never above long run nominal GDP (4 to 5%). No business can permanently outgrow the economy.
Enterprise value is the value of the whole business (debt plus equity). Equity value subtracts net debt. Per share value divides equity value by shares outstanding.
Most DCF results have terminal value at 50 to 80% of total. This is mathematically expected when discount rates exceed growth rates and reflects how much value is created beyond the explicit projection.
10 years is standard for stable businesses; 5 years for higher uncertainty. Longer projections shift weight away from terminal value but require more assumptions.
Cash generated by operations minus capex and working capital changes. The cash actually available to all capital providers (debt and equity holders combined).
DCF is most useful as a thinking discipline, not a forecasting tool. The number is highly sensitive to assumptions. Use it to test what assumptions are needed to justify a price, not to predict the right price.
Other tools for different parts of your financial picture.
The calculator uses the standard DCF methodology with explicit projection period plus Gordon Growth terminal value. Methodology references are drawn from CFA curriculum, Damodaran and standard corporate finance textbooks.
This calculator is provided for general educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any security. DCF valuation is highly sensitive to assumptions and should be used as one of several inputs to an investment decision, not as a standalone forecast. Consult a licensed investment professional before making material investment decisions.
This calculator gives you the number. Our free courses teach you the why behind the math, the assumptions to question, and how to apply it to your own portfolio.
Enter revenue, growth, margin, tax, capex, working capital, WACC and terminal growth. See enterprise value, FCF and terminal value split, optional per share comparison.
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