Discounted Cash Flow Ecommerce Calculator
Value an ecommerce business by discounting its projected free cash flows to present value.
About Discounted Cash Flow Ecommerce Calculator
The projection period is a geometric series that can be summed in closed form, and the terminal value capitalises the final year at the Gordon growth formula. Terminal value usually accounts for well over half the total, which is why the terminal assumptions matter more than the near-term forecast. Small changes in the discount and terminal growth rates move a DCF valuation enormously, so the implied multiple is the sanity check that keeps the answer honest.
Formula
Discounted Cash Flow Ecommerce
Value = Σ FCF_t ÷ (1+r)^t + terminal value ÷ (1+r)^n, with terminal value = FCF × (1+g) ÷ (r − g)
- r
- Discount rate reflecting risk
- g
- Terminal growth rate, which must be below r
Worked example
With the default values below, Discounted Cash Flow Ecommerce Calculator returns Enterprise Value of $3,035,680. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Current annual free cash flowminimum 0
- 250,000
- Annual growth in cash flowaccepts 0–100 %
- 12 %
- Discount rateaccepts 0–100 %
- 15 %
- Projection periodaccepts 1–20 years
- 5 years
- Terminal growth rateaccepts 0–100 %
- 3 %
Results
- Enterprise Value
- $3,035,680
- Present Value of the Projection Period
- $1,155,511
- Terminal Value
- $3,781,692
- Present Value of Terminal Value
- $1,880,169
- Implied Multiple of Current Cash Flow
- 12.14 x
Step by step
- 1Values used
- 2Discounted Cash Flow Ecommerce
- 3Enterprise Value= 3,035,680
- 4Present Value of the Projection Period= 1,155,511
- 5Terminal Value= 3,781,692
- 6Present Value of Terminal Value= 1,880,169
- 7Implied Multiple of Current Cash Flow= 12.14 x
Assumptions and limits
- The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or fees or charges into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Discounted Cash Flow Ecommerce calculated?
Value = Σ FCF_t ÷ (1+r)^t + terminal value ÷ (1+r)^n, with terminal value = FCF × (1+g) ÷ (r − g) The projection period is a geometric series that can be summed in closed form, and the terminal value capitalises the final year at the Gordon growth formula. Terminal value usually accounts for well over half the total, which is why the terminal assumptions matter more than the near-term forecast.
Why does Discounted Cash Flow Ecommerce matter?
Small changes in the discount and terminal growth rates move a DCF valuation enormously, so the implied multiple is the sanity check that keeps the answer honest.
What values do I need to enter?
This calculator takes 5 inputs: Current annual free cash flow, Annual growth in cash flow, Discount rate, Projection period, Terminal growth rate. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.