• Valuation

Discounted
Cash Flow

Estimate the value implied by operating assumptions and future free cash flow.

Model assumptionsLive

Model inputs

TTM Revenue

Revenue growth

EBIT margin

Earnings before interest and taxes, a measure of operating profit.

WACC

Weighted average cost of capital, the blended required return for debt and equity funding.

Terminal growth

The steady long-term growth rate assumed after the explicit forecast period.

Net debt

Debt minus cash, used to bridge enterprise value to equity value.

Start with the main business drivers. Detailed forecast rows, cash, debt, shares, and tax settings stay editable below.

Advanced assumptions

Cash

Debt

Diluted Shares

Share count including likely dilution from options, warrants, or similar instruments.

Tax Rate

Mid-year convention

Terminal value is 86% of EV. Consider longer projection or stress-testing g.

TV methods diverge by 121% — reconcile Gordon g with implied growth from your exit multiple.

Variables and terms

TTM Revenue

An input assumption used by this calculator. Change it to see how the result moves.

Revenue growth

An input assumption used by this calculator. Change it to see how the result moves.

EBIT margin

Earnings before interest and taxes, a measure of operating profit.

WACC

Weighted average cost of capital, the blended required return for debt and equity funding.

Terminal growth

The steady long-term growth rate assumed after the explicit forecast period.

Net debt

Debt minus cash, used to bridge enterprise value to equity value.

Cash

An input assumption used by this calculator. Change it to see how the result moves.

Debt

An input assumption used by this calculator. Change it to see how the result moves.

Diluted Shares

Share count including likely dilution from options, warrants, or similar instruments.

Tax Rate

The percentage assumption used by the calculation.

Mid-year convention

A DCF timing assumption that treats cash flows as arriving through the year instead of only at year-end.

How to read this calculator

Enterprise value is the present value of operating cash flows. The equity bridge adds cash and subtracts debt before dividing by diluted shares. Compare terminal value share of EV and the sensitivity table before using the implied price per share as a decision input.

Enterprise value$12.48M4.7x revenue

Equity value$10.38MImplied price per share $42.16 · TV share of EV 86%

Free cash flow forecast

Unlevered free cash flow, USD millions

Y1$0M

Y2$0M

Y3$0M

Y4$0M

Y5$1M

Value bridge

PV of forecast cash flows$2M

PV of terminal value$11M

Enterprise value$12M

Forecast drivers and projection detail

Driver	Y1	Y2	Y3	Y4	Y5
Rev growth %
EBIT margin %
D&A % rev
CapEx % rev
ΔNWC % Δrev
Revenue	3.0	3.3	3.7	3.9	4.2
FCF	0.3	0.4	0.5	0.5	0.6
PV(FCF)	0.3	0.3	0.4	0.4	0.4

Terminal value assumptions

Terminal Value

Gordon GrowthExit MultipleAverage (both)

Terminal g

The steady long-term growth rate assumed after the explicit forecast period.

Exit Multiple

The valuation multiple assumed when selling or valuing the business at the end of a forecast.

Implied g from exit multiple: 5.70%

Gordon PV(TV)

$7M

Exit Multiple PV(TV)

The valuation multiple assumed when selling or valuing the business at the end of a forecast.

$15M

Additional analysis

WACC \ g	1.50%	2.00%	2.50%	3.00%	3.50%
6.50%	$49.08	$51.12	$53.66	$56.93	$61.30
7.50%	$44.05	$45.39	$47.00	$48.97	$51.44
8.50%	$40.12	$41.06	$42.16	$43.46	$45.02
9.50%	$36.90	$37.59	$38.38	$39.29	$40.36
10.50%	$34.17	$34.70	$35.29	$35.96	$36.73

Reverse DCF — what's priced in?

Target price/share

Solve for

Implied revenue growth: 15.52%

Valuation charts

Tornado — price sensitivity

Methodology

Methodology keeps the DCF bridge visible. Free cash flow is projected from operating assumptions, discounted at WACC, extended through terminal value, then bridged from enterprise value to equity value.

Free cash flow (unlevered)

FCF_t = EBIT_t \cdot (1 - \tau) + D\&A_t - CapEx_t - \Delta NWC_t

Present value (mid-year convention)

PV_t = \dfrac{FCF_t}{(1 + WACC)^{t - 0.5}}

Terminal value (Gordon, 1959)

TV_N = \dfrac{FCF_N \cdot (1 + g)}{WACC - g}, \quad g < WACC

Equity bridge (Modigliani-Miller, 1958)

\text{Equity} = EV + Cash - Debt

Price per share

P = \dfrac{\text{EV} + \text{Cash} - \text{Debt}}{\text{Shares}} = \dfrac{12 + 1 - 3}{0} = \$42.16

References

Irving Fisher, The Theory of Interest, 1930.Reference context for time value of money, discounting, present value, and interest-rate mathematics.
Franco Modigliani and Merton H. Miller, The Cost of Capital, Corporation Finance and the Theory of Investment, American Economic Review, 1958.Reference context for capital structure, cost of capital, and enterprise/equity valuation framing.
Myron J. Gordon, Dividends, Earnings, and Stock Prices, Review of Economics and Statistics, 1959.Reference context for constant-growth valuation and terminal-growth constraints.

For educational and informational purposes only. Not financial advice.