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    CASH FLOW & VALUE

    Explore the value
    behind cash flow.

    Estimate the present value of annual cash available to the company’s capital providers after operating costs, tax and reinvestment. Enter your forecast and discount rate, then see how cash, debt and other claims turn operating enterprise value into equity value.

    Annual FCFFExplicit terminal assumptions

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    Calculate a valid scenario to download.

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    Your cash-flow scenario

    Start with the example, then change the inputs.

    Your cash-flow scenario
    Use one currency throughout. Enter 5,000 for five thousand, not 5 for five thousand.
    Weighted average cost of capital: the annual discount rate for all capital providers. Enter 10 for 10%.
    Enter free cash flow to the firm (FCFF) for year 1 on the first line, year 2 on the next, for 1–50 full years. Use cash flow before interest and debt repayments. Grouped amounts such as 5,000 are accepted. Do not leave blank lines.
    Applies to explicit and continuing cash flows.
    Choose perpetuity growth to include cash flows after the forecast, or no terminal value to value only the entered years.
    Must be strictly below WACC and above −100%.
    Annual FCFF for the first year after your forecast. Enter it separately; the tool does not grow the last forecast amount for you.

    Enterprise-to-equity bridge

    Add cash and nonoperating assets that are outside the operating cash-flow forecast. Enter debt and other claims as positive amounts to subtract. Enter zero where no adjustment applies, and avoid counting an asset or claim twice.

    Number of diluted shares in individual shares, not millions. Leave blank to calculate enterprise and equity values without a per-share result.

    Calculated in this browser. Your inputs stay in memory and are cleared on reload.

    THE METHOD

    Value follows timing and assumptions.

    FCFF is cash available to all capital providers, before financing flows. Discount it at the supplied WACC. Perpetuity growth uses an explicitly supplied sustainable cash flow for the year after the forecast.

    Year-end PV = FCFFₜ ÷ (1 + WACC)ᵗ
    Terminal value at N = FCFFₙ₊₁ ÷ (WACC − g)
    Enterprise value = forecast PV + terminal PV

    Mid-year convention: use exponent t−0.5 for explicit FCFF. At horizon end, multiply the perpetuity terminal value by √(1+WACC), then discount it for N years. This treats the entire continuing stream at yearly midpoints.

    Illustrative worked example

    FCFF of 110 and 121 at 10% WACC gives PVs of 100 and 100. With N+1 FCFF of 33 and 0% perpetual growth, terminal PV is 272.73 and enterprise value is 472.73.

    The displayed bridge adds 20 cash and 10 nonoperating assets, then subtracts 70 debt, 5 preferred, 4 noncontrolling interest and 1 other claim. Equity is 422.73; 10 diluted shares gives 42.27 per share.

    Know what is assumed.

    • Enter money in individual currency units and shares in individual shares. Expand amounts reported in thousands or millions before using them here.
    • Full consecutive annual periods, constant nonnegative WACC and a non-financial operating company. No stub periods, banks, insurers, exit multiples or default model.
    • Negative explicit cash flows are valid. A perpetually negative terminal stream is unsupported. Terminal growth at or above WACC is an error.
    • Unknown shares block only per-share output. Nonpositive equity remains a residual for review, not a stock-price estimate.
    • Cash, debt, NCI and other claims require reviewed valuation scope. Diluted shares are an approximation; options are not separately valued here.

    Method sources: NYU Stern FCFF valuation and Damodaran’s DCF questions. Midpoint timing above is the project’s explicit geometric-series convention.