Discounted Cash Flow (DCF) Calculator
Gain instant access to state-of-the-art Discounted Cash Flows (DCF) valuation models for any stock globally.
We make all assumptions clear and visible so you can fine-tune them if you wish to.
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WMTDiscounted Cash Flow (DCF) is a valuation model that calculates a stock's value based on its forecasted future cash flows. All future operating cash flows are discounted back to the present to arrive at the final value.
DCF model is widely regarded as the gold standard of valuation models. DCF's main concern is how much cash flows the company can potentially generate for its investors.
With an accurate and reliable DCF valuation, value investors can determine whether to buy or to sell a security/stock.
To build a DCF model for a company, we first calculate its projected cash flows using its revenue, operating expenses, CAPEX, tax rate, etc... The next step is to figure out an appropriate discount rate to bring future cash flows to their present value and then to sum them up.
DCF model is very complicated, time-consuming and involves multiple assumptions. Therefore, our DCF calculator can significantly save you time and take the subjective guessing out of the process.
DCF models usually involve 2 main components:
- CF -- Future cash flows. These are typically annual numbers. The number of years the company is expected to generate cash flows is usually 5 or 10 years.
- r -- Discount rate. This is typically the company's cost of capital (WACC)
The discount rate is then used to discount expected future cash flows to their present value. The summation of those present values gives us the final DCF valuation.
