About the DCF Valuation Pro
What is the DCF Valuation Pro?
A DCF valuation values a business at the present value of the free cash flow it will generate. This calculator projects cash flow at your growth rate for the forecast years, adds a Gordon-growth terminal value and discounts everything at your discount rate.
The result is enterprise value, split between the explicit forecast and the terminal value.
How to use the DCF Valuation Pro
- Current Free Cash Flow (INR) (sample: 25,00,000)
- Cash Flow Growth (%) (sample: 10)
- Discount Rate (%) (sample: 14)
- Terminal Growth (%) (sample: 4)
- Explicit Forecast Years (sample: 5)
- Press Run DCF (results also refresh as you type). The result card shows the Enterprise Value, along with Explicit Cash Flow Value, Discounted Terminal Value and Discount Rate.
Formula used
EV = Σ FCFₜ ÷ (1 + r)ᵗ + [FCFₙ × (1 + g) ÷ (r − g)] ÷ (1 + r)ⁿ
- r = discount rate
- g = terminal growth rate, which must be below r
Subtract net debt from enterprise value to get equity value.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Current Free Cash Flow (INR) | 25,00,000 |
| Cash Flow Growth (%) | 10 |
| Discount Rate (%) | 14 |
| Terminal Growth (%) | 4 |
| Explicit Forecast Years | 5 |
| Result | Value |
|---|---|
| Enterprise Value | ₹3,29,91,830 |
| Explicit Cash Flow Value | ₹1,12,44,171 |
| Discounted Terminal Value | ₹2,17,47,659 |
| Discount Rate | 14% |
Tips for using the DCF Valuation Pro
- Keep terminal growth close to long-run nominal GDP growth – 4–6% for India.
- If the terminal value is over 75% of EV, the valuation depends heavily on distant assumptions.