Valuation Lab · Calculator
This DCF values an operating business from a five-year unlevered forecast: free cash flow is EBIT after cash taxes plus depreciation and amortization, less capital expenditure and the change in operating working capital, discounted at WACC with an end-of-year convention. Terminal value is next-year free cash flow divided by WACC minus growth (or an exit multiple on year-five EBITDA), discounted back to today, and its share of the result is shown. Debt and excess cash enter only in the equity bridge.
A discounted cash flow is the only method here that prices the plan rather than the market. That makes it the right cross-check for a company whose multiple is contested and the wrong tool for anyone who wants a quick market read. The heatmap exists because the answer is a function of two assumptions nobody knows precisely: the discount rate and the terminal growth rate. Click a cell to adopt those assumptions and the whole page follows.
The copy on this page is scoped to valuing a business. Searches for “DCF calculator” also come from equity investors valuing a share; the arithmetic is the same, but the inputs here are company-level operating assumptions, not per-share dividends.
The interactive calculator loads here. The published example scenario below is the same model (2026.09.22-1) evaluated at the example inputs.
Present enterprise value (unlevered DCF, 5 years + terminal): $18.1M. Equity value $18.1M after cash and debt; terminal value 72% of enterprise value
Free cash flow = EBIT x (1 – tax) + D&A – capex – change in working capital, discounted at WACC with end-of-year convention. Terminal: Year-6 free cash flow / (WACC 12.0% – g 2.5%). End-of-year discounting. Cash taxes are zero in loss years; no refund or carry-forward is assumed.
PV of 5-year cash flows: $5.1M · PV of terminal value: $13.0M · Year-5 revenue: $16.4M · Year-5 FCF: $2.1M
| Year | Revenue | Growth | EBIT | Margin | Cash taxes | D&A | Capex | Change in NWC | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Year 1 | $11.5M | 15.0% | $1.4M | 12.0% | $345K | $345K | $345K | $150K | $885K | 0.893 | $790K |
| Year 2 | $13.0M | 12.8% | $1.8M | 13.5% | $438K | $389K | $389K | $147K | $1.2M | 0.797 | $930K |
| Year 3 | $14.3M | 10.5% | $2.1M | 15.0% | $537K | $430K | $430K | $136K | $1.5M | 0.712 | $1.1M |
| Year 4 | $15.5M | 8.3% | $2.6M | 16.5% | $640K | $465K | $465K | $118K | $1.8M | 0.636 | $1.1M |
| Year 5 | $16.4M | 6.0% | $3.0M | 18.0% | $740K | $493K | $493K | $93K | $2.1M | 0.567 | $1.2M |
| Terminal value | $22.9M | $13.0M | |||||||||
| Enterprise value | $18.1M | ||||||||||
| Equity value (EV + cash – debt) | $18.1M |
End-of-year discounting. Cash taxes are zero in loss years; no refund or carry-forward is assumed. Financing cash flows are excluded from unlevered free cash flow. Model 2026.09.22-1.
| Input | Value |
|---|---|
| Base-year revenue | $10,000,000 |
| Revenue growth, year 1 | 15% |
| Revenue growth, year 5 | 6% |
| Operating (EBIT) margin, year 1 | 12% |
| Operating (EBIT) margin, year 5 | 18% |
| Discount rate (WACC) | 12% |
| Terminal growth | 2.5% |
| Terminal method | Perpetuity growth |
| Cash tax rate | 25% |
| Depreciation & amortization (% revenue) | 3% |
| Capital expenditure (% revenue) | 3% |
| Working capital (% of revenue change) | 10% |
| Excess cash | $0 |
| Debt | $0 |
With perpetuity growth, terminal value = year-5 free cash flow x (1 + g) / (WACC – g), then discounted five years. The tool refuses a terminal growth rate at or above WACC because the formula is undefined there; the published fixture with five years of $1M cash flow at 10% WACC and 0% growth returns $10.0M of enterprise value, of which $6.2M is discounted terminal value. With the exit-multiple method, terminal value is the chosen multiple times year-5 EBITDA, discounted the same way. Whichever you use, the share of value sitting in the terminal period is reported; above about 70% the result is mostly an assumption about the far future.
Financing cash flows do not belong in unlevered free cash flow. Interest, debt repayment and dividends are excluded from the forecast, and debt and excess cash are applied once, in the bridge, after enterprise value is calculated. Working-capital adjustments agreed at closing sit outside the DCF as well.
If you are weighing a sale and want a senior advisor to test these numbers against live buyer appetite, the first conversation is confidential and without obligation.
Private lower-middle-market companies are usually discounted at 12%-20% unlevered, reflecting size, concentration and illiquidity. The heatmap shows how sensitive the answer is to that choice; the calculator does not pick a rate for you.
Because a perpetuity capitalizes every year beyond year five. At 10% WACC and 0% growth, the discounted terminal value is about 62% of the fixture result. Lower WACC or higher growth push it higher.
Yes, as long as the forecast turns cash-positive. Loss years carry zero tax and negative free cash flow reduces the present value; if the company never reaches positive cash flow the result is not meaningful.
The multiple method prices the company off what comparable businesses sold for; the DCF prices the plan. When they disagree, the difference is the market’s view of the plan’s risk.
Not in the cash flows. Enterprise value is computed unlevered, then debt is subtracted and excess cash added to reach equity value.
Enterprise value is quoted cash-free and debt-free; equity value adds excess cash and subtracts debt and debt-like items, before fees, taxes, escrow, rollover and earn-outs. Every method states its denominator, period (trailing twelve months unless labelled), currency (USD) and treatment of cash and debt. Results are ranges under stated assumptions, not statistical confidence intervals. Company inputs stay in the browser and are never transmitted. Benchmark snapshot 2026.09.22-1; model 2026.09.22-1; changes are recorded in the Valuation Lab changelog in the Windsor Drake repository.
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