DCF Calculator
Estimate discounted cash flow value, terminal value, and present value of forecast cash flows with WealthCalcLab.
Updated April 5, 2026
What this calculator does
This DCF calculator estimates the present value of future cash flows and a terminal value using a discount rate and long-run growth assumption.
DCF is one of the most useful valuation frameworks because it forces assumptions about cash generation, timing, and required return into a single structured model.
It is also highly sensitive to inputs, so the real value of the calculator is often in scenario testing rather than in one precise-looking output.
How to use it
Enter the expected first-year cash flow, forecast growth rate, discount rate, terminal growth rate, and projection horizon.
Check the discounted terminal value carefully because terminal assumptions can dominate the final valuation.
Compare multiple scenarios instead of relying on a single base case.
Formula
PV = cash flow ÷ (1 + discount rate)^yearTerminal value = final cash flow × (1 + terminal growth) ÷ (discount rate - terminal growth)Enterprise value equals the sum of discounted forecast cash flows and the discounted terminal value.
Methodology
Cash flows are projected forward each year using the growth assumption, then discounted back to present value using the discount rate.
Terminal value is estimated using a Gordon-growth style perpetuity formula after the explicit forecast period.
The calculator requires the discount rate to exceed the terminal growth rate so the valuation remains mathematically stable.
Worked example
A business with strong near-term cash flow growth can still produce a modest DCF value if the discount rate is high or the terminal assumption is conservative.
That is why valuation work should focus as much on assumptions and ranges as on the headline result.
How to interpret the results
DCF value is the present value implied by your assumptions, not an objective market truth.
If discounted terminal value is most of the enterprise value, the model may be highly sensitive and worth stress testing further.
Common mistakes
- Using a terminal growth rate that is too high relative to the discount rate.
- Treating a DCF output as precise despite highly uncertain assumptions.
- Ignoring how sensitive the model is to small changes in discount rate or terminal growth.
Key terms
Quick definitions for the finance terms that matter on this page.
Discount rate
The required return used to translate future cash flows into present value.
Terminal value
The value of cash flows expected beyond the explicit forecast period.
Frequently asked questions
Clear answers on assumptions, interpretation, and the limits of each estimate.
Why must discount rate exceed terminal growth?
Because otherwise the terminal value formula becomes unstable or mathematically invalid.
Is DCF best for every business?
Not always. It is strongest when cash flow can be estimated with reasonable structure.
Why does terminal value matter so much?
Because in many DCF models, a large share of total value comes from cash flows beyond the explicit forecast period.
Should I use revenue or cash flow?
DCF is built on cash flow, not revenue, because cash flow better reflects distributable economic value.
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Important disclaimer
Indonesia figures are planning estimates only. Confirm local rates, lender disclosures, tax rules, and legal treatment with official sources before acting.