What is a DCF Calculator?
DCF valuation estimates what future free cash flows are worth today. It is powerful precisely because the assumptions are explicit — and dangerous when a single optimistic growth or terminal-value assumption is treated as fact.
Enter a starting free cash flow, forecast growth, discount rate, terminal growth, net debt, cash and shares outstanding. FinPockett shows the forecast period, terminal value and the resulting equity value per share.
Discounted cash flow methodology
The discount rate must be above the terminal growth rate. Net debt is subtracted and cash added to move from enterprise value to equity value.
Terminal value can dominate the answer
If most of enterprise value comes from terminal value, the model is effectively making a very long-range assumption. Always inspect the sensitivity matrix rather than quoting a single intrinsic-value number.
Use internally consistent cash flow and discount rate
Enterprise free cash flow should be discounted at a rate appropriate to the operating cash flows. Mixing equity cash flow, enterprise cash flow and discount rates can produce a mathematically tidy but economically inconsistent valuation.
Frequently asked questions
Is DCF an investment recommendation?
No. It is an assumption-driven valuation framework.
Why must WACC exceed terminal growth?
The perpetuity-growth formula becomes undefined or economically implausible when long-run growth equals or exceeds the discount rate.
Why is the sensitivity matrix mandatory?
Small changes in discount and terminal growth rates can materially change the valuation, so a single-point result can create false precision.