![]() What is DCF (Discounted Cash Flow)?ĭCF is a popular absolute stock valuation calculation technique to find the intrinsic value of the stocks. If you’re looking to find the intrinsic value of Indian stocks, you can use Trade Brains Portal’s DCF Calculator, where all these financial values are available for quick calculation. Investors can quickly calculate the DCF to find the intrinsic value of the stocks using the discounted cash flow (DCF) calculator. Then, we have to discount all the future cash flows to the current Net Present Value (NPV), using the discount rate. The terminal value of the company is also calculated for the final year. In order to find the discounted cash flows, first, we have to project the future cash flows of the company for the next few years by assuming a yearly growth rate of the company. If the Free Cash Flow (FCF) of the company is Rs 3,000 Cr, Total cash is Rs 200 Cr, Total debt is Rs 500 Cr, Total outstanding shares is 150 Cr, the Expected growth rate for the next 10 years is 12%, the discount rate is 10%, and terminal value multiple is 8, along with the margin of safety of 10%, then the intrinsic value of the company will be Rs 370.03. Let’s take a look at an example of DCF calculation to find the intrinsic value. After entering all these stock data, the DCF calculator will calculate the Intrinsic value of that stock, based on the inputs. ![]() While using the DCF calculator, you have to find and enter the Free Cash Flow (FCF), Expected growth rate, discount rate, and other financial information of the company like total cash, debt, outstanding shares, and more. You can use the DCF Calculator to find the intrinsic value of stocks. If the Intrinsic value of the company is greater than its current share price, it is undervalued. In addition, you can find whether the company is overvalued or undervalued using the calculated Intrinsic value. Investors should ideally buy the stocks at near the intrinsic value of the company. This intrinsic value is the real value of the company based on its cash flows, assets, and financial situation. Why is the DCF calculator used?ĭCF Calculator is used for calculating the intrinsic value (IV), in other words, the true value of the company. This method involves projecting FCF over the assumed time period, calculating the terminal value at the end of that period, and discounting all the FCFs and terminal values using the calculated discount rate to find the Net Present Value (NPV) of the total expected future cash flows of the company. The DCF Valuation involves valuing a company using the concept of Time Value of Money, where the future cash flows of the company are estimated and discounted by using the cost of capital to find their present value.
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