DCF Sensitivity Calculator
Estimate how enterprise value changes with discount rate and terminal growth assumptions (simple 3x3 sensitivity).
Most DCFs are dominated by discount rate and terminal value assumptions. A sensitivity grid helps you see how fragile (or robust) your valuation is.
This calculator computes enterprise value at a 3x3 grid around your base discount rate and terminal growth assumptions.
Prefer an explanation- Read the guide.
DCF sensitivity: discount rate vs terminal growth (how to read it)Valuation modeling hub: WACC, DCF, multiples, and equity valueARR valuation sensitivity: a simple multiple grid for scenariosDCF valuation: forecast cash flows, discount rate, and terminal value
$
%
%
%
%
%
Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$92,389,745.51
- Current annual free cash flow (FCF)
- $5,000,000
- Forecast years
- 5
- Forecast growth (annual)
- 15%
- Base discount rate
- 12%
- Discount rate step
- 2%
- Base terminal growth
- 3%
- Terminal growth step
- 1%
How to calculate
- Enter current annual free cash flow (FCF) and a simple forecast (years + growth).
- Enter base discount rate and terminal growth.
- Enter steps for discount rate and terminal growth to generate a 3x3 grid.
Formula
EV = sum (FCF_t/(1+r)^t) + (FCF_(n+1)/(r - g_terminal))/(1+r)^n; Sensitivity varies r and g_terminal
- Uses a simple constant growth forecast during the explicit period.
- Terminal value uses a perpetuity growth model.
- Only shows a small grid; use broader scenarios for full sensitivity analysis.
FAQ
Why do some grid points disappear-
Because the perpetuity model requires terminal growth to be less than the discount rate (r > g). When g is too high relative to r, the terminal value becomes mathematically invalid.
How should I pick the steps-
A common starting point is +/-1-3% for discount rate and +/-0.5-1% for terminal growth. If valuation changes wildly, you need more conservative assumptions and/or better forecasting detail.
Common mistakes
- Terminal growth >= discount rate (invalid in perpetuity model).
- Treating a single scenario as precise (false precision).
- Using accounting profit instead of free cash flow.
Related calculators
Finance
Deferred Revenue Rollforward Calculator
Bridge billings to recognized revenue by rolling deferred revenue forward for a period.
Finance
Break-even Revenue Calculator
Estimate the revenue needed to break even given fixed costs and gross margin.
Finance
NPV Calculator
Calculate net present value (NPV) from initial investment, annual cash flow, years, and discount rate.
Finance
IRR Calculator
Estimate internal rate of return (IRR) for an investment using yearly cash flows.
Finance
Discounted Payback Period Calculator
Estimate discounted payback period using a discount rate (and compare to simple payback).
Finance
Cash Runway Calculator
Estimate runway from cash balance, revenue, gross margin, and operating expenses (optionally with revenue growth).
Quick checks
- Use consistent time units (monthly vs annual) when entering rates and cash flows.
- Run a sensitivity check on the input that drives the result most (often discount rate or growth).
- Treat the output as a decision aid, not a prediction; validate assumptions with reality.