Discounted Cash Flow (DCF

Discounted Cash Flow (DCF) is a core financial valuation methodology that estimates a company's intrinsic value based on its projected future cash flows discounted back to their present value using WACC.

To use the Discounted Cash Flow (DCF) Valuation Calculator, enter your Year 1 Free Cash Flow, Annual Cash Flow Growth Rate (Years 1-5), Discount Rate / WACC and other values. The calculator instantly computes Intrinsic Enterprise Value (DCF), PV of 5-Year Cash Flows and more. Results update in real time as you change any input — no submit button needed.

How to Use This Calculator

Enter your Year 1 Free Cash Flow (e.g. 100000 in ), Annual Cash Flow Growth Rate (Years 1-5) (e.g. 10 in %), Discount Rate / WACC (e.g. 9 in %), and Terminal Perpetual Growth Rate (e.g. 2.5 in %). Results update instantly as you type — adjust any value to compare scenarios.

The Formula

Present Value (PV) = Cash Flow_t / (1 + r)^t

Terminal Value (Gordon Growth) = [CF_5 × (1 + g_term)] / (r - g_term)

Intrinsic Enterprise Value = Sum of 5-Year PVs + PV of Terminal Value

Worked Example

100,000 Year 1 cash flow, 10% 5-year growth, 9% discount rate (WACC), 2.5% terminal growth rate.

• PV of 5-Year Projected Cash Flows: 419,

891.

• Gordon Growth Terminal Value: 1,610,

510.

• Intrinsic DCF Enterprise Value: 419,891 + 1,046,725 = 1,466,

616.

Understanding Your Result

The cash conversion cycle (CCC) = Days Sales Outstanding + Days Inventory Outstanding – Days Payable Outstanding. A shorter (or negative) CCC means cash comes in faster than it goes out — Amazon famously has a negative CCC. Current ratio (current assets ÷ current liabilities) above 1.5 is generally considered healthy; below 1.0 indicates liquidity risk. Quick ratio (excluding inventory) above 1.0 is the standard benchmark for businesses that cannot quickly liquidate inventory. Working capital of 10–20% of annual revenue is a typical target for stable SMBs.