What is a DCF?
Discounted cash flow estimates value by converting future cash flows into today’s dollars at a required return.
Discounted Cash Flow Calculator
Project free cash flows with growth or a custom list, discount them, and optionally add a Gordon growth terminal value.
Build a simple DCF
Choose growth projection or a cash-flow list. Terminal value is optional using Gordon growth.
About this calculator
How to use Discounted Cash Flow Calculator, plus the formulas and logic behind the results.
Tool description
A discounted cash flow (DCF) values an equity claim by discounting expected free cash flows and, often, a terminal value. Gordon growth sets terminal value as next year’s CF divided by (r − g).
How to use
- Choose growth mode or paste a custom cash-flow list.
- Enter the discount rate (required return).
- Optionally enable Gordon terminal value and set perpetual growth g < r.
- Select Calculate to view PV of cash flows, terminal PV, and equity value.
Formulas & reference
CFₜ (growth) = Base × (1 + g_cf)^(t−1)PV = Σ CFₜ ÷ (1 + r)ᵗTerminal (Gordon) = CFₙ × (1 + g) ÷ (r − g)Equity value ≈ PV of CFs + PV of terminal
DCF reminders
- Keep terminal g below the discount rate
- Longer projections increase assumption risk
- List mode overrides growth inputs
- Equity value here is pre-share-count
Calculation logic
Explicit-period cash flows are built from growth or a list, discounted yearly. If enabled, Gordon terminal value uses the last explicit CF, perpetual g, and rate r, then discounts TV back to today.
Simplified educational DCF—no debt netting, working capital detail, or share count. Results are sensitive to r and g.
Discounted Cash Flow Calculator FAQ
Common questions about the calculation and how to interpret the estimate.
What is Gordon growth?
A perpetual-growth model: TV = CFₙ(1+g)/(r−g), used when cash flows grow forever after year n.
Why must g be less than r?
If g ≥ r the Gordon denominator is zero or negative and the model breaks.
Growth vs list mode?
Growth builds CFs from a base and rate; list mode uses the exact amounts you enter.
Is this enterprise or equity value?
This educational tool discounts the cash flows you enter as an equity-style value—no automatic net debt adjustment.
Are results investment advice?
No. They illustrate formulas for learning and scenario comparison only.