Calculator Guide

What is DCF (Discounted Cash Flow) Valuation?

DCF (Discounted Cash Flow) valuation kya hoti hai aur kaise kaam karti hai — free cash flow, discount rate aur terminal value samjhein.

Definition

DCF ek valuation method hai jo kisi company ki future expected free cash flows ko "present value" mein discount karke uski intrinsic (fair) value estimate karta hai. Idea simple hai — ek rupya aaj jitna valuable hai, wahi rupya 5 saal baad utna valuable nahi hoga, isliye future cash flows ko ek discount rate se "aaj ki value" mein convert kiya jaata hai.

Formula

Enterprise Value = Σ [FCFₜ / (1+r)ᵗ] + Terminal Value / (1+r)ⁿ

  • FCFₜ: Free Cash Flow in year t
  • r: Discount rate (typically WACC — Weighted Average Cost of Capital)
  • Terminal Value: Projection period ke baad ka estimated value, ek stable growth rate assume karke

Steps

  1. Company ka current/base Free Cash Flow (FCF) estimate karein.
  2. Ek realistic growth rate assume karein projection period (typically 5 saal) ke liye.
  3. Ek discount rate (WACC) decide karein — company ke risk profile ke hisab se.
  4. Har saal ka projected FCF discount karke present value mein convert karein, phir sum karein.
  5. Terminal value add karein (projection period ke baad ki value), phir net debt adjust karke Equity Value nikalein.
  6. Neeche calculator mein ye assumptions daal kar Enterprise Value, Equity Value aur Fair Value Per Share dekhein.

Example

Example: ₹10 crore base FCF, 10% growth rate, 12% discount rate (WACC), 5-saal projection — ye assumptions Enterprise Value estimate karne ke liye kaafi hain; calculator poora sensitivity breakdown bhi deta hai.

Frequently Asked Questions

DCF valuation kya hoti hai?

DCF (Discounted Cash Flow) ek valuation method hai jo company ki future expected free cash flows ko present value mein discount karke uski intrinsic (fair) value estimate karta hai.

DCF mein discount rate ke liye kya use karte hain?

Typically WACC (Weighted Average Cost of Capital) use hota hai — ye company ke equity aur debt, dono ki combined cost of capital ko represent karta hai, risk ke hisab se adjusted.