Discounted Cash Flow Model Template
Don't waste hours creating your own discounted cash flow model.
Discounted cash flow (DCF) is used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.
Instructions
1: Input the valuation date, discount rate, perpetual growth rate, and tax rate.
2: Forecast the company's key financials and calculate the corresponding free cash flows.
3: Discount the Projection Period and Terminal cash flows to the present using the discount rate.
4: The sum of future cash flows determines the aggregate value of the business today.
- Firmex Team
Discounted cash flow (DCF) is used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good one.
Instructions
1: Input the valuation date, discount rate, perpetual growth rate, and tax rate.
2: Forecast the company's key financials and calculate the corresponding free cash flows.
3: Discount the Projection Period and Terminal cash flows to the present using the discount rate.
4: The sum of future cash flows determines the aggregate value of the business today.
- Firmex Team