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Discounted Cash Flow (DCF) Tool

Calculate intrinsic equity valuation and company share worth based on projected Free Cash Flows (FCF), discount rates, and terminal values.

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DCF Valuation Summary
Present Value of 5-Yr Cash Flows ₹ 47,85,21,000
Present Value of Terminal Value ₹ 1,42,10,50,000
Total Enterprise Value ₹ 1,89,95,71,000
Intrinsic Value Per Share

₹ 189.96

About the Discounted Cash Flow (DCF) Tool

Our free Discounted Cash Flow (DCF) Tool helps equity investors and financial analysts estimate the intrinsic value of a company or stock. By projecting future Free Cash Flows (FCF) and discounting them back to their present value using an appropriate discount rate (such as WACC), DCF analysis reveals whether a stock is undervalued or overvalued relative to its market price.

How DCF Valuation Works

The Discounted Cash Flow model operates on the principle that the true value of an asset equals the present value of all the cash flows it is expected to generate in the future. The calculation involves two main phases:

  • Explicit Forecast Period (Years 1-5): Projecting annual free cash flows using an expected growth rate and discounting each year's cash flow back to present value.
  • Terminal Value: Estimating the value of the business beyond the forecast period using a perpetual growth rate and discounting it back to present value.

How to Use the DCF Calculator

Simply enter the core financial inputs for the company:

  • Current Free Cash Flow (FCF): The latest annual free cash flow generated by the business.
  • Expected FCF Growth Rate: The projected annualized growth rate for the next 5 years.
  • Discount Rate / WACC: The cost of capital used to discount future cash flows to account for risk.
  • Perpetual Growth Rate: The long-term sustainable growth rate of the company into perpetuity (typically aligned with GDP growth).
  • Total Outstanding Shares: The total number of shares issued by the company to determine intrinsic per-share value.

Click the Calculate button to instantly view the present value of cash flows, terminal value, enterprise value, and intrinsic value per share.

Frequently Asked Questions (FAQs)

What is WACC in DCF analysis?
WACC stands for Weighted Average Cost of Capital. It represents the blended cost a company pays to finance its assets through debt and equity, serving as the standard discount rate in DCF models.
Why is Terminal Value so important in DCF?
Terminal value typically accounts for the majority of a company's total enterprise value in a DCF model because it captures all cash flows beyond the initial 5-year forecast horizon.
How do I interpret the intrinsic value per share?
If the calculated intrinsic value per share is higher than the current market trading price, the stock may be undervalued. If it is lower, the stock may be overvalued.