Calculates the net present value of a series of cash flows.
DCF=CF1(1+r)1+CF2(1+r)2+CFn(1+r)ncap D cap C cap F equals the fraction with numerator cap C cap F sub 1 and denominator open paren 1 plus r close paren to the first power end-fraction plus the fraction with numerator cap C cap F sub 2 and denominator open paren 1 plus r close paren squared end-fraction plus the fraction with numerator cap C cap F sub n and denominator open paren 1 plus r close paren to the n-th power end-fraction CFcap C cap F : The cash flow for a given year (usually Free Cash Flow). discounted cash flow formula excel download
Professional templates include "Data Tables" that show how value changes if the discount rate or growth rate fluctuates. Calculates the net present value of a series of cash flows
(Internal Link Placeholder) Final Pro Tip: (Internal Link Placeholder) Final Pro Tip: A DCF
A DCF is only as good as its inputs ("Garbage In, Garbage Out"). Always be conservative with your growth assumptions and ensure your discount rate accurately reflects the risk of the industry.
Use the Excel PV function or the manual formula CF / (1+r)^n for each year. Sum these up, add the discounted Terminal Value, and you have the . Why Use an Excel Template for DCF?
