DCF Calculator
Intrinsic value per share from projected free cash flows.
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This DCF calculator estimates a company’s intrinsic value per share using a two-stage discounted cash flow model. Enter the latest free cash flow, growth rates for the next ten years, a terminal growth rate and your required return. It discounts the cash flows, adds a terminal value, adjusts for net debt and divides by shares outstanding. You can also check the margin of safety and the Graham number.
What is a DCF Calculator?
Discounted cash flow (DCF) valuation estimates what a business is worth today based on the cash it is expected to generate in future. Money received later is worth less than money today, so each year’s projected cash flow is discounted back at a rate that reflects the return you require.
A DCF calculator projects free cash flow for ten years, adds a terminal value for the years beyond, discounts everything to today, subtracts net debt and divides by the number of shares. The result is an estimate of intrinsic value per share, which value investors compare with the market price.
How does the DCF Calculator work?
Free cash flow grows at the first growth rate for years 1–5 and at the second rate for years 6–10. Each year’s cash flow is divided by (1 + discount rate) raised to the year number.
The terminal value uses the Gordon growth formula on year 10’s cash flow. Enterprise value is the sum of present values; subtracting net debt gives equity value.
How to use the DCF Calculator step by step
- Enter the latest free cash flow in ₹ crore.
- Set growth for years 1–5 and 6–10.
- Set a terminal growth rate, usually close to long-term GDP growth.
- Enter your discount rate.
- Enter net debt and shares outstanding.
- Add the current price, EPS and book value to see margin of safety and the Graham number.
DCF Calculator example with real numbers
A company generated ₹1,000 crore of free cash flow last year. You expect 15% growth for five years, 10% for the next five, and 5% after that. You want a 12% return, the company has ₹500 crore of net debt, and 50 crore shares trade at ₹1,200.
| Example input | Value |
|---|---|
| Free cash flow | ₹1,000 crore |
| Growth years 1–5 / 6–10 | 15% / 10% |
| Terminal growth | 5% |
| Discount rate | 12% |
| Net debt | ₹500 crore |
| Shares outstanding | 50 crore |
| Current price | ₹1,200 |
| Example output | Value |
|---|---|
| Intrinsic value per share | ₹519.38 |
| Present value of 10-year cash flows | ₹10,824 crore |
| Present value of terminal value | ₹15,645 crore |
| Enterprise value | ₹26,469 crore |
| Equity value | ₹25,969 crore |
| Terminal value share of total | 59.1% |
| Margin of safety at current price | -131.0% |
The DCF calculator values the equity at ₹25,969 crore, or ₹519.38 per share. At ₹1,200 the share trades well above this estimate (margin of safety -131.0%), so on these assumptions it looks expensive. Notice that the terminal value makes up 59.1% of the total, which is why the terminal growth assumption matters so much.
Key features of this DCF Calculator
- Two-stage, ten-year DCF
- Terminal value with Gordon growth
- Net debt or net cash adjustment
- Margin of safety
- Graham number
- Year-by-year cash flow table
Who should use the DCF Calculator?
Who is this DCF Calculator for?
- Long-term equity investors
- Finance students and CFA candidates
- Analysts checking a quick valuation
- Investors comparing price with value
Practical use cases
- Estimating the fair value of a listed company
- Testing how sensitive value is to growth
- Checking margin of safety before buying
- Comparing DCF with the Graham number
Key benefits
- Structured thinking: forces clear assumptions.
- Sensitivity: see how much each input matters.
- Complete: DCF and Graham in one place.
- Transparent: every year’s cash flow shown.
Tips for better results
- Use free cash flow from the cash flow statement: operating cash flow minus capital expenditure.
- Keep terminal growth below the discount rate and near long-term nominal GDP growth.
- Run a cautious, base and optimistic case.
- Look for a margin of safety of 20–30% before buying.
Common mistakes to avoid
- Using very high growth rates for ten years.
- Setting terminal growth close to the discount rate.
- Using profit instead of free cash flow.
- Forgetting net debt.
Limitations of this DCF Calculator
- The result is only as good as the assumptions.
- Not suitable for banks, insurers or loss-making companies.
- It does not model changes in share count or dilution.
DCF Calculator vs other ways to calculate
| Method | Based on | Best for |
|---|---|---|
| DCF | Future cash flows | Stable cash-generating businesses |
| P/E multiple | Earnings and peers | Quick comparisons |
| Graham number | EPS and book value | Conservative value screening |
| Price to book | Net assets | Banks and asset-heavy firms |
Stock screeners show P/E and other ratios for quick comparisons. To track returns after you buy, use the ROI calculator and the dividend yield calculator.
Privacy and data handling
This DCF Calculator runs entirely in your browser. The numbers you type are not sent to Qorico or stored on any server, and nothing is saved after you close the page. The Copy and Download buttons create the result on your own device. If the page has analytics turned on, it may count that a calculation happened, but it does not record the values you entered.
DCF Calculator FAQs
What is DCF valuation?
A method that values a business by discounting its expected future cash flows back to today’s value.
How is intrinsic value calculated?
Add the present value of projected free cash flows and the terminal value, subtract net debt, and divide by shares outstanding.
What discount rate should I use?
Your required return, often 11–14% for Indian equities, reflecting risk-free rates plus an equity risk premium.
What is the Graham number?
A conservative fair-value estimate: the square root of 22.5 × EPS × book value per share.
What is terminal value?
The value of all cash flows beyond the forecast period, usually calculated with a perpetual growth formula.
Why does my DCF change so much with small inputs?
Because the terminal value is a large share of the total and is sensitive to the gap between discount and growth rates.
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Sources and references
We checked the method and the current figures used in this DCF Calculator against these official and primary sources:
Written and reviewed by the Qorico Team
