DCF Valuation Calculator
Originally published: 17/05/2023 12:17
Publication number: ELQ-96472-1
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DCF Valuation Calculator

DCF Valuation (LTG Method) is suitable for business models/ projects that are expected to continue on a going-on basis.

Description
Oak Business Consultants has developed the DCF Cash Flows Valuation calculator to assist investors in determining the equitable value of their investments. This tool employs the concept of discounted cash flows, where projected Free Cash Flows (FCF) for the next five years are adjusted for risk factors. It incorporates two distinct approaches for calculating the Net Present Value (NPV) based on discounted cash flows:
DCF Valuation by Long-Term Growth Method: This method utilizes the projected Free Cash Flows to Equity for the startup or project. It also considers the survival rate, which is determined by the estimated time period and the industry's survival rate.
DCF Valuation by Multiples Method: Similarly, this method relies on the projected Free Cash Flows to Equity for the startup or project. It also takes into account the survival rate based on the estimated time period and the industry's survival rate.
Overall, both methods enable investors to estimate the fair value of their investments by incorporating projected FCF and adjusting for risk factors and survival rates.
DCF Valuation (LTGMethod):
 This DCF Valuation template can be used for startup projects that are expected to continue forever. Furthermore, the terminal value is evaluated by multiplying last year’s forecasted free cash flow with the survival rate. Furthermore, it multiplies last year’s estimated long-term growth rate and discount rate.

DCF Valuation by Multiples Method:
Startup projects or other business models that are expected to halt operations in the future. Furthermore, it can use this method to determine the terminal value for NPV calculation after the operations will be discontinued. Thus, the terminal value is calculated by multiplying last year’s projected EBITDA with the industry’s survival rate and the EBITDA multiple.

Benefits of the DCF Valuation Calculator
The tool helps you understand the methods and their use in a different framework.
You just have to change the input, and you will get the output automatically.
Also, the tool contains different methods in a single excel document. In addition, you do not have to buy different models for different valuation methods.

This Best Practice includes
1 Excel File

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Further information

The calculator utilizes the DCF method, which is based on projected free cash flows over the next 5 years, discounted by a risk factor.

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