What is Discounted Cash Flow (DCF)?
Discounted Cash Flow analysis estimates the present-day value of an investment or business by discounting its projected future cash flows back to today’s dollars, reflecting the time value of money and investment risk.
The formula
Present Value = Σ [Cash Flow in Year t / (1 + Discount Rate)^t], summed across all forecast years, plus the discounted terminal value representing cash flows beyond the forecast period. Cash flows are grown each year at the assumed growth rate.
This calculator is for general financial education and analysis practice, not investment advice. DCF results are highly sensitive to the discount rate, growth rate, and terminal value assumptions used.
Last reviewed August 2026