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Discounted Cash Flow Calculator
Discount forecast annual cash flows and a terminal value back to today.
Discounted Cash Flow Calculator
Enter your numbers and the result updates straight away.
Outputs
Planning estimate only. Verify assumptions before making a financial decision.
Higher discount rates reduce present value; higher sustainable cash flow or terminal growth increases it.
How this calculation works
This simplified model assumes one starting cash flow, a constant forecast growth rate, a constant discount rate, and a terminal growth rate.
How to interpret the result
DCF results can change sharply with small changes in discount rate and terminal assumptions. Always show a sensitivity range.
Limitations
Results are educational planning estimates. They do not include every tax, legal, accounting, financing, or business-specific consideration and are not professional advice.
Formula and example
Higher discount rates reduce present value; higher sustainable cash flow or terminal growth increases it.
Common use cases
- Value a stable operating business.
- Test long-term assumptions.
- Compare intrinsic value with a market multiple.
Discounted Cash Flow Calculator FAQ
Why does terminal value dominate some DCF results?
A large share of value can come from cash flows beyond the explicit forecast. That makes discount-rate and terminal-growth sensitivity essential.
Can terminal growth exceed the discount rate?
No. The Gordon-growth formula becomes invalid when terminal growth is equal to or above the discount rate.
How is DCF calculated?
This simplified model assumes one starting cash flow, a constant forecast growth rate, a constant discount rate, and a terminal growth rate.
How should I interpret the result?
DCF results can change sharply with small changes in discount rate and terminal assumptions. Always show a sensitivity range.