Finance tools
Discounted cash flow DCF calculator
Use this free discounted cash flow (DCF) calculator to estimate business or stock value from your own cash-flow assumptions —no ticker feed or sign-up. Run a two-stage model or custom yearly cash flows, with optional equity per share, margin of safety, and CSV/PDF export. For project accept/reject with an initial investment, use our NPV calculator. Illustrative estimates only—not investment or tax advice.
What is discounted cash flow (DCF)?
Discounted cash flow (DCF) estimates what a business or asset is worth today by projecting future cash flows and discounting them at a discount rate that reflects risk and the time value of money. Add the present value of your explicit forecast to a terminal value for the years beyond—together they form total DCF value, often shown as enterprise value when you model unlevered firm cash flow.
Teams use DCF for business valuation, M&A screening, and stock valuation when they already have forecasts. This page is built for that workflow: you enter the numbers, the calculator handles present value and Gordon terminal math, and the schedule lets you audit every year.
Results are illustrative for education and planning—not investment, tax, or legal advice.
Growth or custom forecasts
Constant-growth two-stage model, or 1–15 yearly cash flows you type in.
PV schedule
Year-by-year cash flow, present value, and forecast vs terminal split.
Equity bridge
Optional net debt, shares outstanding, and market price for per-share equity.
CSV/PDF export
Download inputs and results to compare with spreadsheets or coursework.
DCF formula and terminal value
Present value of a cash flow in year t (end-of-year timing in this tool):
Present value of one cash flow
PV = CFₜ ÷ (1 + r)ᵗ
Where r is the discount rate (as a decimal) and CFₜ is cash flow in year t.
Gordon growth terminal value
TV = CFₙ × (1 + g) ÷ (r − g)
Long-run growth g must stay strictly belowr. Terminal value is discounted back from the end of the explicit forecast.
Total DCF value
DCF value = PV(explicit forecast) + PV(terminal value)
Each forecast year uses end-of-year timing: Year 1 cash flow is discounted by (1 + r)¹, Year 2 by (1 + r)², and so on.
Example: Year 1 cash flow of $108,000 at a 10% discount rate has present value $98,182 (108,000 ÷ 1.10). The calculator sums each year the same way, then adds discounted terminal value—use the schedule table to match your spreadsheet or coursework.
Terminal value assumptions
Terminal value often drives a large share of total DCF value—so terminal growth and discount rate deserve conservative, well-documented assumptions.
- Terminal growth (g) — often anchored near long-run GDP or inflation (roughly 2–3% in many US models), not the company’s early high-growth rate.
- Discount rate (r) — must exceed g; small changes in r − g swing terminal value sharply.
- Final-year cash flow — Gordon TV uses the last explicit forecast year; in custom mode, enter flows that reflect a sustainable run-rate before terminal.
Why terminal value dominates
In a typical two-stage model, terminal value can be most of the total—on our Conservative (5y) preset, the PV of terminal is about 72% of DCF value. Small changes to g or r often matter more than nudging only Year 1 cash flow.
This calculator uses the Gordon growth model only (no exit-multiple terminal). If g ≥ r, the tool shows an error instead of an infinite value.
Which cash flows should you enter?
Match the cash-flow definition to your discount rate. For a firm-level enterprise DCF, many models use unlevered free cash flow (cash available to all capital providers) and discount at WACC. For equity DCF, use levered free cash flow to equity and a required return on equity—this tool’s default framing is enterprise-style totals in USD.
You can enter totals (e.g. $250,000 firm FCF) or scale per-share numbers across all years if you prefer—the math is the same as long as debt and shares stay consistent in Advanced. We do not build a full FCFF worksheet from revenue and capex; you bring the cash-flow line items your model already uses.
Scenario presets (starting points)
- Conservative (5y) — $100k FCF, 8% growth, 5 years, 10% discount, 2.5% terminal (textbook-style growth company).
- Mature business — $250k FCF, 3% growth, 5 years, 9% discount, 2% terminal (slower, lower risk profile).
- Growth company — $50k FCF, 15% growth, 7 years, 12% discount, 3% terminal (higher growth and discount rate).
Private companies and startups follow the same steps: you supply the forecasts. Because DCF is sensitive to growth and discount rates, document your assumptions and stress-test a range rather than treating one output as precise.
Enterprise value vs equity value
Enterprise value (EV) from the DCF is the value of operating cash flows before capital-structure adjustments. Equity value is a common bridge:
Equity bridge (simplified)
Equity value ≈ Enterprise value − Net debt
Value per share ≈ Equity value ÷ Shares outstanding. Enter net debt (debt minus cash), share count, and optional market price in Advanced to see per-share equity and margin of safety vs your DCF output.
Net debt sign matters: positive net debt reduces equity value; net cash increases it. For a dedicated price-vs-fair-value view, see the margin of safety calculator.
Is DCF the same as NPV?
NPV (net present value) and DCF use the same present-value idea—money later is worth less today—but they answer different questions. Confusing them is one of the most common mistakes in finance homework and models.
DCF vs NPV at a glance
- NPV — discounts project cash flows and subtracts initial investment; result is accept (NPV > 0) or reject. Built for capital budgeting.
- DCF — sums PV of forecast plus terminal value for total business value; may add net debt bridge for equity. Built for valuation.
- Present value alone — discounts one or more flows without a terminal-value story; see the present value calculator for lump-sum and annuity PV.
Use our NPV calculator for uneven project streams and an upfront cost. Use this DCF calculator when you need Gordon terminal value, enterprise totals, and optional per-share equity.
Worked example: two-stage DCF
Select Conservative (5y) in growth mode (or enter the same inputs): $100,000 starting cash flow, 8% growth, 5 projection years, 10% discount rate, 2.5% terminal growth.
Sample two-stage result
Total DCF value ≈ $1,720,240 (enterprise-style total).
PV of forecast ≈ $473,379 · PV of terminal ≈ $1,246,861.
Check the year-by-year table, then try 12% discount or 3% terminal growth to see how quickly the total moves.
Mature business preset (compare)
For contrast, choose Mature business: $250,000 starting FCF, 3% growth, 5 years, 9% discount, 2% terminal.
Total ≈ $3,802,822 (forecast PV ≈ $1,058,116, terminal PV ≈ $2,744,706)—slower growth and a lower discount rate shift both the level and how much comes from the terminal phase.
In custom mode, enter uneven yearly flows (e.g. ramp-up years) when a single growth rate does not fit. The tool warns if any forecast year is zero or negative because Gordon terminal value may be misleading.
How to use the DCF calculator
Choose growth or custom mode
Pick Growth for one starting cash flow and a steady growth rate through the forecast, or Custom to type 1–15 yearly cash flows.
Enter cash flows and rates
Add free cash flow, discount rate, and terminal growth (terminal growth must stay below the discount rate). In growth mode you can project up to 30 years.
Review the PV schedule
Read total DCF value, PV of the forecast, terminal value, and the year-by-year table in the results panel.
Optional equity bridge and export
In Advanced, add net debt, shares, or market price for per-share equity and margin of safety. Export CSV or PDF to save or compare with Excel.
Quick check with defaults
Load defaults or tap Conservative (5y), confirm the results show both forecast and terminal PV, then change one input at a time. Dollar amounts for that preset are in the worked example section above.
How to calculate DCF in Excel
Put yearly cash flows in a row or column. Excel’s =NPV(rate, range) discounts a series but starts one period after the first cell—align timing with your model. Terminal value is often added in the final forecast year or discounted separately.
Excel formulas (copy-paste)
Assume discount rate 10% in cell B1, terminal growth 2.5% in B2, and yearly cash flows in C1:C5 (Year 1 in C1).
- PV Year t:
=C1/(1+$B$1)^1(copy down with exponent 2, 3, …) - PV forecast:
=SUM(C1/(1+$B$1)^ROW(C1:C5))or sum individual PV cells - Terminal value:
=C5*(1+$B$2)/($B$1-$B$2)using final-year CF in C5 - PV of terminal:
=TV/(1+$B$1)^5when the forecast has 5 years - Total DCF: PV forecast + PV terminal
NPV() timing: Excel’s =NPV(rate, range) assumes the first cash flow occurs one period after “today.” Align your Year 1 column with that convention or discount manually as above.
Export the schedule from this calculator to compare row-by-row with Excel—handy for coursework, model checks, and validating Gordon terminal math.
Choosing a discount rate
Match the rate to the cash-flow definition:
- WACC — common discount rate for unlevered firm free cash flow (blend of equity and debt costs).
- Cost of equity — when cash flows are already to equity holders only.
- Hurdle rate — internal required return for strategic or private deals.
Typical WACC ranges (illustrative only)
Many US large-cap models land near 8–12% WACC depending on sector leverage and risk; high-growth or private names often use higher required returns. Your case may differ—use the WACC calculator for a components-based estimate (cost of equity, cost of debt, weights).
Higher discount rates lower present values; lower rates raise them. Always document why your r matches the cash flows you entered.
Limitations and common mistakes
DCF is only as good as your forecasts. Common pitfalls:
- Overstated terminal growth — using a high g that exceeds sustainable macro growth.
- Discount rate mismatch — equity cash flows discounted at WACC, or ignoring risk in private forecasts.
- Ignoring net debt — comparing enterprise DCF output directly to share price without the equity bridge.
- False precision — small input changes can move value by double-digit percentages.
- Double-counting — mixing per-share cash flows with enterprise debt in the bridge.
Included here
Two-stage Gordon DCF, growth and custom modes, PV table, equity bridge, margin of safety vs price, presets, CSV/PDF export.
Not modeled here
Ticker auto-fill, reverse DCF, sensitivity grids, exit-multiple terminal, full FCFF build-up, Monte Carlo simulation.
Try these instead
Intrinsic value (Graham + stock DCF), NPV (project accept/reject), market cap (price × shares).
Learn more
Investor.gov — investing basics (general education, not professional advice).
More free tools
Discover more calculators for time tracking, payroll, and HR.
Frequently asked questions about this DCF calculator
What is discounted cash flow (DCF)?
Discounted cash flow (DCF) is a valuation method: you forecast future cash flows, discount them to today’s value, and add a terminal value for years after the forecast.
The total is often interpreted as enterprise value when you model firm-level cash flow and discount at WACC. It is a planning and education tool—not a guarantee of market price.
How do you calculate discounted cash flow?
Use the calculator above or follow these steps:
- Forecast free cash flows for an explicit period.
- Pick a discount rate that matches those flows (often WACC).
- Discount each year: PV = CF ÷ (1 + r)ᵗ.
- Estimate terminal value with Gordon growth (g must be below r).
- Add PV of the forecast and PV of terminal value; optionally bridge to equity with net debt.
What is a DCF calculator?
A DCF calculator (or discounted cash flow calculator) runs the present-value and terminal-value math from your inputs—growth or custom yearly cash flows, discount rate, and terminal growth.
Use it to explore business or stock valuation, coursework, or M&A sketches. This one is free and simple in growth mode: one starting cash flow and a steady growth rate, plus optional per-share equity and export.
Is DCF the same as NPV?
They share discount math, but the question is different. NPV subtracts an initial investment to decide whether a project earns enough (accept if NPV > 0).
DCF sums forecast cash flows plus terminal value to estimate business or enterprise value. Use our NPV calculator for projects; use this page for DCF valuation.
How do I calculate DCF in Excel?
Discount each forecast year (for example =C1/(1+r)^1), compute terminal value on the final year, discount TV to today, and add the parts. Excel’s NPV() can discount the forecast range if you align its timing convention.
See How to calculate DCF in Excel below for copy-paste formulas, or export the schedule from this calculator to compare row-by-row.
What discount rate should I use for DCF?
Use WACC for unlevered firm cash flow; use cost of equity when cash flows are already to shareholders. The rate must match what you entered. Our WACC calculator helps estimate components from capital structure and risk.
What is terminal value in DCF?
Terminal value captures cash flows after your explicit forecast—often with the Gordon model: TV = CFₙ × (1 + g) ÷ (r − g), where g is long-run growth and r is the discount rate.
You then discount terminal value back to today and add it to the PV of the forecast years. Terminal value often makes up most of total DCF value.
Why must the discount rate be greater than terminal growth?
Gordon terminal value divides by (r − g). If g equals or exceeds r, the formula breaks (zero or negative denominator). This calculator shows an error instead of a meaningless number.
What is enterprise value vs equity value?
Enterprise value is the value of operating cash flows before financing adjustments. Equity value is what belongs to shareholders: roughly enterprise value minus net debt.
Enter net debt and shares in Advanced to see equity value and value per share from your DCF output.
How many years should you forecast in a DCF model?
Many models use 5–10 years while growth still changes, then rely on terminal value for the rest. This tool allows up to 30 years in growth mode or 15 custom yearly rows.
What are the five steps of a DCF model?
Forecast cash flows, choose a discount rate, discount each explicit year, estimate terminal value, and sum to total value—then subtract net debt if you want equity value. The steps above the FAQ walk through the same flow in the calculator UI.
What is free cash flow in a DCF model?
Free cash flow is cash the business can distribute after operating needs and investments. Firm-level DCF often uses unlevered FCF with WACC.
Enter amounts consistent with your model (totals or per-share). This calculator does not derive FCF from revenue and capex—you supply the forecast.
What is a two-stage DCF model?
Stage 1 is your explicit forecast (constant growth or custom yearly rows). Stage 2 applies Gordon growth terminal value from the final forecast year. That is what this calculator implements— not exit multiples or a third high-growth stage.
How does margin of safety work with DCF?
If you enter market price and a DCF-based value per share, Advanced compares them and shows margin of safety—how far price sits below your estimate. Treat it as illustration only, not a trading signal. See also the margin of safety calculator.
Can you use a DCF calculator for private companies?
Yes. You supply revenue, margin, and cash-flow assumptions—there is no public ticker. Accuracy depends on your forecast quality and discount rate, not on market quotes.
How does DCF compare to intrinsic value calculators?
The intrinsic value calculator pairs Benjamin Graham’s formula with a compact stock DCF. This page is DCF-first: custom yearly flows, enterprise totals, and a full PV schedule.
Can I use a DCF calculator for real estate?
You can type property cash flows in custom mode, but there is no rent roll or cap-rate builder. For NOI yield, use the cap rate calculator; for price growth scenarios, see real estate appreciation.
Does this DCF calculator use stock tickers?
No. You enter cash flows and rates manually—no ticker lookup, auto-fill, or live market data feed.
Is this DCF calculator free?
Yes. Growth and custom modes, the PV schedule, and CSV/PDF export are free with no sign-up or paywall.
Are DCF results investment advice?
No. Results are illustrative estimates for education. For general investing concepts, see Investor.gov — investing basics; consult qualified professionals for decisions.