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Discounted Cash Flow (DCF) Calculator

DCF Valuation Calculator

Estimate intrinsic value using Discounted Cash Flow analysis.

Intrinsic Value per Share

₹36.32

Total Firm Value

₹1,81,58,184

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Discounted Cash Flow (DCF) Valuation Formula

Intrinsic Value = ∑ [ FCF_t / (1 + WACC)^t ] + Present Value of Terminal Value

Calculates stock value by discounting projected future free cash flows to present value using WACC discount rate.

Worked Example: Company with ₹1,000 Cr cash flow growing at 8% (WACC 10%, terminal growth 4%)

Intrinsic share valuation based on cash generation: **₹2,145.60 per share**.

Discounted Cash Flows: Intrinsic valuation based on cash generation

Anuj was analyzing an enterprise software firm generating ₹1,000 Crores in free cash flow. He projected growth at 8% p.a., using a WACC discount rate of 10%.

His DCF model estimated the intrinsic share price at ₹2,145.60. Comparing this valuation to the market price of ₹1,800 allowed him to invest with a margin of safety.

DCF valuation calculates the intrinsic worth of a firm by discounting projected future free cash flows back to present day value.

DCF models are highly sensitive to initial growth rate and discount rate assumptions. Use conservative inputs to protect your margin of safety.

Frequently Asked Questions

What is DCF Valuation?

Discounted Cash Flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future free cash flows, discounted back to the present day.

What is WACC in a DCF model?

Weighted Average Cost of Capital (WACC) is the discount rate used to calculate the present value of future cash flows, representing the firm's blended cost of equity and debt.

Why is the Terminal Value so important in DCF?

Because you only project specific cash flows for 5-10 years, the Terminal Value represents the value of all cash flows beyond that period, often accounting for 60-80% of the total calculated intrinsic value.

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