Simplified cash-flow valuation
Intrinsic Value Calculator
This simplified DCF converts operating free cash flow into an estimated enterprise value, adjusts for net debt and divides by shares outstanding. It is designed for transparent scenario testing, not false precision.
Formula behind the calculator
Equity value per share = (PV of FCF + PV of terminal value − net debt) / sharesFree cash flow grows for the selected forecast period, each year is discounted, and a Gordon Growth terminal value captures cash flows beyond the explicit forecast.
How to use it
- 1Normalize current free cash flow by removing unusual working-capital or one-time effects.
- 2Select a defensible explicit growth path, discount rate and conservative terminal growth rate.
- 3Enter diluted shares and net debt on the same millions basis as free cash flow.
- 4Compare bear, base and bull cases rather than relying on one output.
Interpret the result
- The output is the value implied by your assumptions. A precise-looking number does not make uncertain inputs precise.
- Compare the result with the market price and calculate a margin of safety, but investigate why a gap exists.
- Businesses with negative or highly volatile free cash flow require a more detailed multi-stage model than this simplified calculator.
Go deeper
Frequently asked questions
Is this intrinsic value calculator a full DCF model?
It is a transparent simplified DCF. A full model can forecast revenue, margins, reinvestment, taxes and capital structure in greater detail.
Should net cash be entered as a negative number?
Yes. Net debt is debt minus cash, so a company with more cash than debt has negative net debt and that value is added to equity value.
Which free cash flow does the calculator use?
The formula is designed for operating free cash flow before payments to debt and equity holders, paired with a WACC discount rate.
How sensitive is intrinsic value to terminal growth?
Often very sensitive because terminal value can represent a large share of total value. Keep the rate conservative and test a range.
Can the result be negative?
Yes. Heavy net debt or weak cash-flow assumptions can produce a negative equity value, which signals that the entered scenario does not support common equity.