Company Valuation Calculator: WACC, free cash flow, DCF & EPS
Curious how analysts estimate what a company's shares might be worth? This tool chains four classic corporate-finance building blocks — the cost of capital (WACC), free cash flow, a discounted cash flow (DCF) valuation, and earnings per share (EPS) — into one worked example, so you can see exactly how each number feeds the next.
Free for everyone to use, no sign-up. Nothing you type leaves your browser.
Educational tool — not investment advice
This calculator is built for learning, not for making investment decisions. It runs a simplified, textbook version of a discounted cash flow valuation: it does not represent any real company, does not use live market data, and ignores real-world complexity that a professional valuation would include (multiple valuation methods, qualitative factors, market conditions, risk not captured by a single discount rate, and more). Nothing on this page is a recommendation to buy, hold or sell any security, and it is not financial, investment, legal, accounting or tax advice. Anthony Skolozdrzyk-Ardouin accepts no liability and denies any responsibility for decisions made using this tool or its results. If you are making a real financial decision, consult a qualified professional. Full disclaimer below.
How to read your results
WACC is the discount rate: roughly, the return a company needs to generate to keep both its shareholders and its lenders satisfied. Free cash flow (FCF) is the cash the business actually generates after paying for the investment it needs to keep running and growing.
The DCF valuation projects free cash flow forward for a few years, adds a "terminal value" for everything after that, and discounts it all back to today using the WACC. The result is a single number: an estimate of what the business (and, per share, its equity) might be worth under the assumptions you entered — nothing more.
EPS is a completely different, simpler measure: profit divided by shares. It is shown alongside the DCF result because it is one of the most common numbers used to describe company earnings, and because the optional P/E ratio and market-price comparison both depend on it.
Change any assumption — the growth rate, the discount rate, the terminal growth rate — and the DCF result moves, often by a lot. That sensitivity is one of the most important things to understand about this kind of valuation: it is a function of its assumptions, not a fact about the business.
Methodology
Assumptions and limits: this is a single-stage growth model with one constant growth rate for the whole projection period, which is a simplification real analysts often replace with multiple stages. The terminal value typically makes up most of the total, so it is highly sensitive to the terminal growth rate and the discount rate. Diluted EPS here is simplified (it does not apply the treasury-stock method used in real financial statements). No live market data is used anywhere: every number on this page comes from what you typed in.
Frequently asked questions
What is WACC?
WACC (weighted average cost of capital) is the average return a company needs to earn on its assets to satisfy both its shareholders and its lenders, weighted by how much of the company is funded by equity versus debt. It is the discount rate most commonly used in textbook company valuations.
What is free cash flow (FCF)?
Free cash flow is the cash a business generates from its operations after paying for the investment needed to keep running and growing (capital expenditure) and after adjusting for changes in working capital. It is often described as the cash left over that could, in theory, be paid out to everyone who has provided the company with capital.
What is a DCF (discounted cash flow) valuation?
A DCF valuation estimates the value of a business today as the sum of its expected future free cash flows, each discounted back to the present using a discount rate (usually the WACC), plus a terminal value for everything beyond the projection period. It is a standard corporate-finance teaching method, built entirely on assumptions the person doing the valuation chooses.
What is EPS, and what is the difference between basic and diluted EPS?
Earnings per share (EPS) divides a company's profit (after preferred dividends) by its shares outstanding. Basic EPS uses the actual shares outstanding; diluted EPS also counts the extra shares that could be created if options, warrants or convertible securities were exercised, so it is usually a little lower.
Is this tool investment advice?
No. This tool is for learning how WACC, free cash flow, DCF valuation and EPS fit together. It is not a recommendation to buy, hold or sell any security, does not use real market data, and should never be the basis of a real financial decision. See the full disclaimer below.