What this does
Most online DCF calculators take three inputs and return a number you can't defend. This one mirrors a real consolidated model: you build cash flows at the operating-unit level, discount them at a WACC you can justify, and cross-check the result against an exit multiple with comparable citations. The output is a valuation you can put in front of ownership or a buyer.
How to use it
1. Enter unit-level cash flows. Project free cash flow for each operating entity over your forecast horizon (typically 5 years). The tool consolidates them — you're not valuing a black box, you're valuing the sum of defensible parts.
2. Set the discount rate. WACC should be transparent: risk-free rate, equity risk premium, beta, size premium, and a company-specific risk premium (CSRP) for the illiquidity and concentration risk inherent in a closely-held operating group. For a private middle-market operator, a CSRP of roughly 2% lands WACC in the ~15–16% range.
3. Cross-check with an exit multiple. A terminal value driven only by perpetuity growth is fragile. The tool shows the implied exit EBITDA multiple next to the perpetuity result, so the two methods triangulate rather than one carrying the whole valuation.
4. Read the range. A single-point valuation hides the thing buyers and owners actually argue about. Flex the WACC and growth inputs to see best / base / downside enterprise value.
Why it's built this way
This tool comes out of a real consolidated model: five operating units flowing through individual DCF tabs into a consolidated valuation, with live cross-sheet links, color-coded inputs, scenario toggles, and sensitivity tables. The free version is the same engine, simplified for self-serve use.
The common mistakes it prevents
- Understating the discount rate. Private operating groups carry illiquidity and concentration risk that a textbook CAPM build ignores. Skipping the CSRP inflates the valuation by a wide margin.
- Relying on perpetuity growth alone. Without an exit-multiple cross-check, terminal value — often 60–75% of total EV — rests entirely on a single growth assumption.
- Single-point answers. A valuation without a range and sensitivity isn't a negotiating tool — it's a guess with false precision.
Want the full Excel model, or a valuation built on your own numbers? Get in touch →