Tools · Discounted cash flow
What the cash is worth, on your assumptions.
A discounted cash flow values a company as the money it will produce, discounted back to what that money is worth today. Set the two assumptions the answer is most sensitive to and the model is rebuilt.
Run a valuation
What this model does
It projects the company’s free cash flow forward at its recent growth rate, discounts each year back to today at a rate set by its beta, adds a terminal value for everything beyond the window, and divides by the share count.
| Input | Source |
|---|---|
| Free cash flow | Reported, via Yahoo Finance |
| Shares outstanding | Reported, via Yahoo Finance |
| Growth rate | The company’s revenue growth, capped at 25% |
| Discount rate | 4% risk-free plus beta × 6% market premium |
| Projection period | Yours |
| Terminal growth | Yours |
A DCF is arithmetic applied to guesses. It is included because the arithmetic is worth seeing, not because the output is precise.