Discounted Cash Flow Enterprise Equity Valuation Calculator

Purpose and model boundary

This model discounts five annual unlevered free cash flows, adds a Gordon-growth or exit-multiple terminal value, and bridges enterprise value to equity value and implied value per diluted share. It is a transparent deterministic valuation template. It does not estimate market inputs or provide investment, fairness, accounting, tax, legal, financing, or transaction advice.

Inputs and units

All cash-flow, terminal-metric, and bridge amounts use one user-consistent currency in millions. Diluted shares are entered in millions, so the implied per-share output uses the corresponding currency per share.

The forecast mode either builds unlevered free cash flow from EBIT, modeled tax rate, depreciation and amortization, capital expenditure, and change in net working capital, or uses the direct UFCF column. The fixed grid requires five complete annual rows in both modes so the inactive route remains auditable. Discount timing is year-end or mid-year. The terminal method is Gordon growth or an exit multiple.

WACC, terminal growth, the minimum WACC-growth spread, and the terminal-value alert threshold are fractions. The exit multiple is a multiple. Gordon-only and exit-multiple-only fields are shown by workbook-authored visibility rules. Cash, nonoperating assets, debt, preferred stock, noncontrolling interest, and diluted shares form the enterprise-to-equity bridge.

Governing relationships

In build-from-EBIT mode, annual unlevered free cash flow is:

UFCF_t = EBIT_t × (1 - modeled tax rate_t) + D&A_t - capital expenditure_t - change in NWC_t

In direct mode, UFCF_t is the entered direct amount. Year-end discounting uses exponent t; mid-year discounting uses t - 0.5:

Discount factor_t = 1 / (1 + WACC)^exponent_t

PV of UFCF_t = UFCF_t × discount factor_t

The two terminal-value routes are:

Gordon terminal value = UFCF_5 × (1 + g) / (WACC - g)

Exit-multiple terminal value = exit terminal metric × exit multiple

Gordon mode requires WACC - g to be at least the entered minimum spread and requires growth greater than -1. Terminal value is discounted with the fifth-period discount factor.

Enterprise value = sum(PV of UFCF_t) + PV of terminal value

Equity bridge = cash + nonoperating assets - debt - preferred stock - noncontrolling interest

Equity value = enterprise value + equity bridge

Implied value per share = equity value / diluted shares

Terminal-value share = PV of terminal value / enterprise value when enterprise value is positive; otherwise the workbook reports zero for that supporting ratio.

Calculation sequence

1. Validate selectors, active scalar assumptions, the Gordon spread when applicable, positive diluted shares, and all five annual rows.
2. Select built or direct UFCF for every period.
3. Apply year-end or mid-year discount factors and sum forecast present values.
4. Calculate the selected terminal value and discount it with the final-period factor.
5. Sum enterprise value, apply the claims bridge, and divide equity value by diluted shares.
6. Calculate terminal-value concentration, chart active and discounted UFCF, and apply status precedence.

Outputs and interpretation

Primary outputs show the present value of forecast UFCF, undiscounted and discounted terminal value, enterprise value, equity value, and implied value per share. Supporting outputs show the bridge adjustment, terminal-value share, and the selected cash-flow and terminal methods. The chart compares active UFCF with its present value across the five periods. A high terminal-value share is a workbook warning about concentration, not an automatic rejection of the valuation.

Validation and status logic

The workbook evaluates status in this order:

Hidden terminal-method inputs are ignored by the calculation. The workbook's exact order means a nonpositive enterprise value takes precedence over the equity and concentration checks.

Assumptions and limitations

• The model uses five equal annual periods. Mid-year timing assumes each year's cash flow is distributed evenly.
• The modeled tax rate is a simple operating-tax convention and does not include tax-loss carryforwards, deferred taxes, interest tax shields, or jurisdiction-specific rules.
• Gordon growth uses fifth-period active UFCF. Exit-multiple mode applies the entered multiple to the entered fifth-period terminal metric.
• The user is responsible for consistent units, metric definition, WACC, growth, and multiple assumptions.
• No stub period, fade period, probability weighting, multiple scenarios, circular financing, option treasury method, or tax-attribute schedule is included.
• A mathematically valid value can still be commercially unreasonable. The workbook does not infer value reasonableness from market evidence.

Restrictions and non-computing states

The grid must contain exactly five complete rows. WACC must be greater than zero and no greater than one. Diluted shares must be positive. In Gordon mode, terminal growth must remain within its computed bounds and the WACC-growth spread must meet the entered minimum. Unknown modes, incomplete rows, a zero share denominator, a failed terminal relationship, or non-finite arithmetic prevents a supported valuation.

Errors and warnings

Input checking can reject unknown options, fields outside their allowed ranges, or an invalid grid before calculation. Workbook NOT VALID covers model-domain and numeric failures. Workbook CHECK preserves computable but cautionary values for review. A service failure is not a zero enterprise value and must be handled separately.

The present-value method follows the general framework indexed by the FASB standards and Concepts Statements and the present-value discussion in the IFRS Foundation's fair-value measurement educational material. No source text, examples, market data, or company forecasts are reproduced.