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DCF calculator

Practice a five-year unlevered DCF using your own free cash flow forecasts. Follow the present-value calculation and see how the terminal assumptions affect operating enterprise value.

2–5 min · No sign-upHow it works
01 / INPUTS

Set your assumptions

Start with the example, then use your own numbers. Dollar amounts are in USD.

Your assumptions

$ millions. Cash flow available to all capital providers, after operating costs, tax and reinvestment, before debt payments.

$ millions. Cash flow available to all capital providers, after operating costs, tax and reinvestment, before debt payments.

$ millions. Cash flow available to all capital providers, after operating costs, tax and reinvestment, before debt payments.

$ millions. Cash flow available to all capital providers, after operating costs, tax and reinvestment, before debt payments.

$ millions. Cash flow available to all capital providers, after operating costs, tax and reinvestment, before debt payments.

%. Enter 10 for 10%. Must exceed terminal growth.

%. Steady growth after year five, below WACC. Enter 3 for 3%.

Calculator values stay in this page. No account or email required.

02 / YOUR RESULT

Operating enterprise value ($m)

216.09

Forecast cash flow present value ($m)
51.63
Year six terminal cash flow ($m)
18.54
Terminal value at year five ($m)
264.86
Terminal value present value ($m)
164.46
Terminal share of enterprise value
76.11%
Show the work
YearFree cash flow ($m)Discount factorPresent value ($m)
Year 1100.90919.09
Year 2120.82649.92
Year 3140.751310.52
Year 4160.683010.93
Year 5180.620911.18
  • Five explicit year-end free cash flows to the firm, discounted at a constant WACC. Terminal value assumes sustainable perpetual growth after year five.
  • This is operating enterprise value, before adding excess cash and other nonoperating assets or subtracting debt and other claims. Use the enterprise-to-equity bridge for that step.
  • Small changes in discount rate or terminal growth can materially change value. A terminal share above 100% can occur when forecast cash flows have a negative present value.

THE METHOD

How this calculator works

EV = sum of FCFFt ÷ (1 + WACC)^t for years 1–5 + [FCFF5 × (1 + g) ÷ (WACC − g)] ÷ (1 + WACC)^5.

Start with cash flow available to all capital providers

Enter unlevered free cash flow, also called free cash flow to the firm, rather than net income or cash flow after debt repayments. This model discounts those operating cash flows at WACC and produces operating enterprise value.

For an interview, explain the forecast before the formula. A working-capital increase uses cash; a release provides cash. This tool accepts completed cash flow forecasts, so you remain responsible for those upstream operating assumptions.

Inspect the terminal value, not just the headline

The perpetuity method starts with year-six cash flow, calculated from year five and the terminal growth rate. Both the forecast cash flows and terminal value are discounted to today using a year-end convention.

Change WACC and terminal growth separately to see how much the answer depends on each. Terminal growth must remain below WACC. A large terminal-value share deserves closer attention to the steady-state forecast; it is not evidence that the value is correct.

WORKED EXAMPLE

From five cash flows to $216.09 million

Cash flows of $10m, $12m, $14m, $16m and $18m discounted at 10% have a present value of $51.63m. With 3% terminal growth, the terminal value is $264.86m at year five, or $164.46m today. Combined operating enterprise value is $216.09m.

Assumptions and limits

  • Cash flows are in millions of the same currency and arrive at each year-end.
  • WACC is constant for all five years and the terminal period; terminal growth continues indefinitely.
  • No midyear convention, exit multiple, cash/debt bridge or share count is included.
  • This is a scenario model for learning and analysis, not a forecast of a traded security’s price.

Common questions

Does this DCF produce enterprise value or equity value?

It produces operating enterprise value from unlevered cash flows. To estimate common equity value, use the enterprise value bridge to add appropriate nonoperating assets and subtract debt and other claims.

Why must terminal growth be below WACC?

The perpetuity formula divides next-year cash flow by WACC minus growth. Equal rates make that denominator zero; a growth rate above WACC does not produce a valid stable-growth valuation in this model.

Can the forecast include negative cash flow?

Years one through four can be negative. This model requires positive year-five cash flow for the steady-state terminal calculation. A business still consuming cash in year five needs a longer forecast or a different model.

Sources and methodology

Reviewed November 6, 2026. Sources support the method described above. Examples are illustrative; results depend on your inputs and require your review.