Value an investment by discounting forecast cash flows and a terminal value.
Please do not make financial decisions based on these results.
What is the Discounted Cash Flow Calculator (DCF)?
Value an investment by discounting forecast cash flows and a terminal value. To use the Discounted Cash Flow Calculator (DCF), enter cash flows by year, discount rate, terminal growth; it returns intrinsic value, pv of forecast cash flows, pv of terminal value, and shows them instantly as you type.
Where the Discounted Cash Flow Calculator fits
Value an investment by discounting forecast cash flows and a terminal value. The main figure it returns is the Intrinsic value, worked out from the values you enter.
It belongs with the other investment tools. If you are comparing options or checking a result from another angle, try the NPV Calculator – Net Present Value, Payback Period Calculator or the CAGR Calculator (Compound Annual Growth Rate).
How to use the Discounted Cash Flow Calculator (DCF)
- Enter your numbers. The inputs are Cash flows by year (comma separated), Discount rate (%), Terminal growth (%). Use a rate of return you consider realistic; small changes compound into large differences. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Intrinsic value, and the cards below show PV of forecast cash flows, PV of terminal value. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Discounted Cash Flow Calculator (DCF) using the default values shown in the calculator above:
Inputs
| Cash flows by year (comma separated) | 100000, 110000, 120000, 130000, 140000 |
|---|---|
| Discount rate (%) | 10 |
| Terminal growth (%) | 2.5 |
Results
| Intrinsic value | $1,635,726.16 |
|---|---|
| PV of forecast cash flows | $447,696.69 |
| PV of terminal value | $1,188,029.46 |
With these inputs the calculator returns Intrinsic value: $1,635,726.16. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Discount rate (%) from 10 to 12 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Intrinsic value | $1,635,726.16 | $1,281,560.98 | -21.7% |
| PV of forecast cash flows | $447,696.69 | $424,447.78 | -5.2% |
| PV of terminal value | $1,188,029.46 | $857,113.20 | -27.9% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Discounted Cash Flow Calculator (DCF) reports Intrinsic value, pv of forecast cash flows and pv of terminal value. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Investment returns are not guaranteed. The result shows what the numbers you enter would produce, not what the market will do. It is for information, not financial, tax or legal advice.
Frequently asked questions
How do I choose a discount rate?
Use the return you could earn on investments of similar risk, often a WACC or required return.
What rate of return should I assume?
There is no guaranteed rate. Test a range of conservative and optimistic rates, and remember that fees and inflation reduce your real return.
Are investment returns guaranteed?
No. Real returns vary. Use these tools to compare scenarios, not to predict results.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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