Discounted Cash Flow (DCF) Calculator

A discounted cash flow (DCF) model converts forecast cash flows into a present value using a discount rate that reflects risk and required return. This DCF calculator uses an explicit forecast of annual cash flows, a Gordon-growth terminal value after the last forecast year, and an initial investment so the headline result is net present value (NPV). Equity analysts, corporate development teams, and investors use a simple DCF as a first-pass valuation before building a full three-statement model. Each forecast cash flow is discounted as CF_t ÷ (1 + r)^t. Terminal value is final cash flow × (1 + g) ÷ (r − g), then discounted for n years. NPV is the present value of the forecast cash flows plus the present value of terminal value minus the initial investment. The discount rate must exceed terminal growth or the perpetuity formula is invalid. With a $50,000 outlay, cash flows of 15k, 18k, 20k, 22k, and 25k, r = 10%, and g = 3%, NPV is $252,498.37 because the terminal value dominates the later present value. Use the model to compare projects, to sanity-check an asking price, or to see how sensitive value is to r and g. Terminal value often accounts for most of a DCF, so a 1-point change in growth or discount rate can move NPV more than a change in year-1 cash flow. Enter cash flows as a comma-separated list with at least as many values as the number of years. A DCF is only as good as its forecasts. It ignores capital-structure changes, mid-year conventions, and taxes unless they are already inside the cash flows. Perpetual growth should not exceed long-run nominal economy growth without a strong reason. Test bull, base, and bear cases, and do not treat a single NPV as a market price. Because terminal value is last cash flow grown one more year and capitalized at r − g, a forecast that ends on a cyclically high year will overstate value. Normalize the final cash flow if the business is lumpy. The cash-flow list is taken in order for year 1 through year n; extra values after n are ignored, and too few values produce an error. Subtracting the initial investment makes the headline an NPV, so a positive result means the present value of inflows exceeds the outlay at your stated discount rate.