DCF valuations investors trust. Fully formula-linked.

Enter your revenue, costs, CAPEX and cost of capital — manual WACC or a full CAPM build-up — and download an automated discounted cash flow valuation in Excel: unlevered free cash flow, Gordon-Growth terminal value, enterprise and equity value, IRR and sensitivity tables, all live formulas.

⚡ Build My DCF Valuation Free — free (requires JavaScript)

A discounted cashflow (DCF) valuation model is a financial analysis method that estimates the intrinsic value of an asset or business by projecting its future unlevered free cash flows and discounting them back to present value using the weighted average cost of capital (WACC).

Enterprise Value = Σ [ CFₜ ÷ (1 + r)ᵗ ] + TV ÷ (1 + r)ⁿ — where CFₜ = unlevered free cash flow in year t, r = WACC, n = final forecast year, TV = terminal value

Forecasting Unlevered Free Cash Flow (UFCF)

Unlevered free cash flow is the cash a business generates before financing — the cash available to all capital providers. It is the numerator of an enterprise-value DCF and must be built from the operating model, not guessed as a growth rate.

UFCF = NOPAT + D&A − CAPEX − Δ Working Capital (NOPAT = EBIT × (1 − tax rate))

Start from operating profit (EBIT), tax it to reach NOPAT, add back depreciation and amortisation (non-cash), then subtract the capital expenditure and the increase in working capital needed to sustain and grow the business. Omitting the working-capital increase is the single most common error that silently overstates value for any growing company — receivables and inventory tie up cash that never appears in profit.

EasyFinancialModels derives UFCF line by line from your revenue, cost, CAPEX and working-capital-days assumptions, so every figure is a live, auditable Excel formula rather than a hard-coded number.

What is free cash flow (UFCF vs LFCF) → · Free cash flow from EBITDA →

Calculating the Weighted Average Cost of Capital (WACC)

WACC is the blended return equity and debt investors require, and it is the discount rate applied to unlevered free cash flow. Because it drives the entire valuation, it deserves a defensible, source-backed build-up rather than a round number.

WACC = (E ÷ V) × Ke + (D ÷ V) × Kd × (1 − tax) · Ke (CAPM) = Rf + β × ERP

The cost of equity (Ke) is built via the Capital Asset Pricing Model: the risk-free rate plus beta times the equity risk premium. It is blended with the after-tax cost of debt by the weights of equity and debt in the capital structure. The model lets you enter WACC directly or build it through CAPM, keeping every component — risk-free rate, beta, ERP, cost of debt, tax — visible and editable.

Small changes in WACC swing the answer materially, which is why the workbook includes two-way sensitivity tables on WACC and terminal growth rather than presenting a single point estimate.

WACC and CAPM: estimating your discount rate →

Determining Terminal Value (TV)

Terminal value captures everything beyond the explicit forecast and often represents 50–75% of total enterprise value — making it the single most important, and most abused, number in a DCF. It is calculated two ways and cross-checked.

Gordon Growth: TV = FCFₙ × (1 + g) ÷ (WACC − g) · Exit Multiple: TV = EBITDAₙ × EV/EBITDA · requires g < WACC

The Gordon-Growth (perpetuity) method assumes free cash flow grows at a constant rate g forever, where g must stay strictly below WACC and approximate long-run GDP plus inflation (typically 2–3%). The exit-multiple method values the final year on a market EV/EBITDA multiple. Best practice is to compute both and confirm they land in the same ballpark, then discount the terminal value back to today before adding it to the sum of discounted cash flows.

The model's integrity check flags any breach of the WACC-versus-growth rule automatically, so you never ship a perpetuity that divides by a negative number.

Terminal value: Gordon Growth vs exit multiple → · DCF vs EV/EBITDA multiple →

Bridging Enterprise Value to Equity Value

Enterprise value is the value of the whole business to all capital providers; equity value is what shareholders own. The bridge from one to the other is where many DIY models quietly go wrong.

Equity Value = Enterprise Value − Net Debt (Net Debt = total debt − cash) · Equity IRR includes the exit

Sum the discounted unlevered free cash flows and the discounted terminal value to get enterprise value, then subtract net debt — total debt less cash — to reach equity value. From there the model computes the equity IRR, including the exit, which is the return figure private-equity and venture investors actually underwrite against their hurdle rate.

Because the whole chain is formula-linked, changing any assumption — WACC, growth, margins, CAPEX — flows straight through to enterprise value, equity value, IRR and the sensitivity tables.

Enterprise value vs equity value explained →

How this DCF model is engineered

The workbook is built to institutional audit standards, not as a black box — so a reviewer can trace and challenge every number. That engineering discipline is what separates a defensible valuation from a spreadsheet nobody trusts.

Cells follow the standard practitioner colour convention: blue for inputs you can change, black for formulas, and green for links across sheets — so anyone opening the file instantly sees what is editable. Nothing is hard-coded except clearly marked assumptions, and the three statements stay fully linked so a change in one flows correctly through the others.

Before download, an Error Check sheet runs automated integrity tests: the balance sheet must balance every period, WACC must exceed terminal growth, and cash adequacy and IRR-versus-hurdle checks run with a live PASS/FAIL. These are the same controls a practitioner applies in a data room.

Full modelling methodology →

Pricing

Build, preview and download free up to 3 years. Models from 5 to 25 years are $19.98 per model download — no subscription.

Frequently asked questions

How do you calculate the terminal value in a DCF model?

Terminal value is most often calculated with the Gordon-Growth (perpetuity) method: TV = final-year free cash flow × (1 + g) ÷ (WACC − g), where the perpetual growth rate g must stay below WACC and approximate long-run GDP plus inflation (typically 2–3%). It can also be computed with an exit multiple (final-year EBITDA × EV/EBITDA). Either way, the terminal value is discounted back to today before being added to enterprise value; EasyFinancialModels computes both methods and cross-checks them.

What is the difference between Enterprise Value and Equity Value in a DCF?

Enterprise value is the value of the entire business to all capital providers — the sum of the discounted unlevered free cash flows plus the discounted terminal value. Equity value is what shareholders own: enterprise value minus net debt (total debt less cash). The DCF model computes both explicitly, along with the equity IRR including the exit.

How does the Capital Asset Pricing Model (CAPM) feed into a DCF?

CAPM produces the cost of equity used inside WACC, the DCF's discount rate. It estimates the return equity investors require as Ke = risk-free rate + beta × equity risk premium. That cost of equity is then blended with the after-tax cost of debt by capital-structure weights to give WACC, which discounts every year of unlevered free cash flow back to present value. EasyFinancialModels shows the full CAPM and WACC build-up as live formulas.

What is a DCF valuation model?

A DCF (discounted cash flow) model values a business as the present value of its future free cash flows plus a terminal value, discounted at the cost of capital (WACC). This tool builds the entire model in Excel automatically — forecast, discounting, terminal value, enterprise and equity value — from your assumptions.

How do I build a DCF model in Excel?

Project unlevered free cash flow (NOPAT + depreciation − CAPEX − working-capital increase), discount each period at WACC, add a discounted terminal value, then subtract net debt for equity value. Enter your assumptions here and the generator writes every one of those formulas into a linked workbook for you.

Is this DCF template really free?

Yes — build, preview and download a full 3-year DCF model free with just your email. Longer horizons (5 to 25 years) are $19.98 per model download, no subscription.

What is WACC and how is it calculated?

WACC is the blended return your investors require — cost of equity weighted with after-tax cost of debt by capital structure. Enter it directly or build it via CAPM (risk-free rate + beta × equity risk premium); the workbook shows the full build-up as live formulas.

What is terminal value in a DCF?

Terminal value captures everything beyond the explicit forecast, usually via Gordon Growth: TV = FCF × (1+g) ÷ (WACC − g). It's often 50–75% of total value, so the model cross-checks it against an EV/EBITDA exit multiple and includes WACC × growth sensitivity tables.

What discount rate should I use for a startup DCF?

Early-stage equity typically demands 20–35%; the Startup template pre-loads a defensible rate you can edit. The sensitivity tables show how valuation moves across a WACC range, which is more honest than a single point estimate.

What is unlevered free cash flow (UFCF)?

UFCF is cash generated before financing: NOPAT plus depreciation, minus CAPEX and the increase in working capital. It's the numerator of enterprise-value DCF, and the model derives it line-by-line from your operating forecast.

What is the difference between enterprise value and equity value?

Enterprise value is the whole business (all capital providers); equity value is what shareholders own — EV minus net debt. The workbook computes both explicitly, plus equity IRR including the exit.

Can I run a DCF monthly or quarterly?

Yes — Annual, Quarterly or Monthly, 3 to 25 years. Discount periods adjust to fractional years automatically and the terminal value annualises correctly, which hand-built quarterly DCFs frequently get wrong.

How many years should a DCF forecast cover?

Five to ten years is typical — long enough for cash flows to mature so the terminal value isn't doing all the work. Asset-heavy businesses (real estate, energy, telecom) often justify 15–25 years, which the premium tier covers.

What growth rate should I use for terminal value?

Long-run GDP-plus-inflation territory: usually 2–3%, never at or above WACC (the formula divides by WACC − g). The model's integrity check flags it if your terminal growth breaches WACC.

Does this DCF handle taxes and loss carryforwards?

Yes — corporate tax auto-fills from your country and remains editable, with a tax schedule applying NOL carryforward so early losses shelter later profits before cash tax hits the valuation.

What is a sensitivity analysis in a DCF?

Two-way tables showing how enterprise and equity value move as WACC, terminal growth, exit multiple and EBITDA flex. Four fully formula-driven sensitivity tables are included — change an assumption and they recalculate.

DCF vs EV/EBITDA multiple — which is better?

Use both: DCF reflects your specific cash profile; multiples anchor you to market pricing. The model computes DCF enterprise value and an EV/EBITDA cross-check side by side so you triangulate rather than trust one number.

What is CAPM and when should I use it instead of entering WACC?

CAPM derives the cost of equity from risk-free rate + beta × equity risk premium — use it when you want a defensible, source-backed build-up (fundraising, valuations for third parties). Toggle 'Build via CAPM' and the workbook shows every component.

Can I use this DCF model for fundraising or investor decks?

Yes — it's an investor-grade, fully linked workbook with visible assumptions, integrity checks and a balance sheet that ties. Export the equity value, IRR and sensitivity tables straight into your deck.

What is equity IRR and why does the model show it?

Equity IRR is the annualised return to shareholders including the exit — the number PE and VC investors actually underwrite. The model computes it against your WACC hurdle and flags whether the deal creates value.

How is working capital handled in this DCF?

Through receivable, inventory and payable days (DSO/DIO/DPO): the model derives balance-sheet working capital and deducts the period increase from free cash flow — a step many DIY DCFs omit, overstating value.

Can I edit the DCF after downloading?

Fully. It's a standard unlocked .xlsx with live formulas — change WACC, growth or any blue input on the Assumptions sheet and the valuation, IRR and sensitivity tables recalculate in Excel, Google Sheets or LibreOffice.

Is a DCF valuation reliable for small businesses?

Yes, when assumptions are honest — DCF just formalises 'what cash will this business hand back?' Keep growth defensible, use the sensitivity range rather than one number, and let the integrity checks catch structural errors.

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