Use this simple DCF (Discounted Cash Flow) calculator to get an estimate of your business's intrinsic value. Enter your financials below to get started.
Many of our clients have expressed interest in understanding their exit opportunities. We created this tool to provide a clear, data-driven starting point. Knowing the approximate value of your business is a crucial first step before exploring a sale or transition.
This calculator uses a method called Discounted Cash Flow (DCF) to estimate your business's value. It’s a standard way to value a business based on its future profit potential. Here’s a simple breakdown:
We start by estimating your business's future profits (or "free cash flow") for the next five years, using your revenue, profit margin, and growth rate. For simplicity, we use net profit as a proxy for cash flow.
A dollar tomorrow is worth less than a dollar today. We "discount" those future profits back to their present-day value using your "Risk & Return Rate." A higher risk rate means future profits are worth less today.
We calculate a "Terminal Value," which is an estimate of your business's value beyond the initial five-year projection, assuming it grows at a steady, long-term rate (like inflation).
Finally, we add up the present value of your projected profits and the terminal value. We then add your cash on hand and subtract any debt to arrive at the final estimated value of your business (its equity value).