Discounted cashflow model

Discounted Cash Flow Valuation Model

A DCF (Discounted Cash Flow) valuation tool that supports full free cash flow projections, terminal value calculation, enterprise value derivation, and automatic generation of a growth rate × discount rate sensitivity analysis matrix.

Quick Start

Basic DCF Valuation

python scripts/dcf_model.py --fcf 1000 --growth 0.15 --discount 0.10

With Sensitivity Analysis Matrix

python scripts/dcf_model.py --fcf 1000 --growth 0.15 --discount 0.10 --sensitivity

Full Equity Valuation + CSV Export

python scripts/dcf_model.py \
    --fcf 5000 --growth 0.12 --discount 0.09 \
    --terminal-growth 0.03 --years 5 \
    --debt 8000 --cash 3000 --shares 10000000 \
    --currency "M USD" \
    --sensitivity \
    --growth-range 0.05,0.25,0.05 \
    --discount-range 0.06,0.14,0.02 \
    --output valuation.csv

Detailed Usage

Core Valuation Workflow

1. Projected Free Cash Flows: Project FCF for each year based on a base FCF and growth rate
2. Terminal Value: Calculated using the Gordon Growth Model (perpetuity growth model): TV = FCF_n × (1+g) / (r-g)
3. Discounting: Discount projected FCFs and terminal value to present value, yielding Enterprise Value
4. Equity Value: Equity Value = EV - Net Debt + Cash
5. Per-Share Value: Per Share = Equity Value / Shares Outstanding

Sensitivity Analysis Matrix

Use the --sensitivity flag to automatically generate a two-dimensional matrix showing enterprise value under different combinations of growth rates and discount rates. This helps visualize how changes in key assumptions affect the valuation.

The base case scenario is marked with [brackets] in the matrix.

JSON Output Mode

Add the --json flag to output the full results in JSON format to stdout, useful for programmatic processing:

python scripts/dcf_model.py --fcf 1000 --growth 0.15 --discount 0.10 --json

Parameters

Parameter	Required	Default	Description
--fcf	Yes	-	Base year free cash flow (positive number)
--growth	Yes	-	Annual growth rate, e.g. 0.15 for 15%
--discount	Yes	-	Discount rate / WACC, e.g. 0.10 for 10%
--terminal-growth	No	0.03	Perpetuity growth rate (must be < discount rate)
--years	No	5	Number of projection years (1–30)
--debt	No	0	Net debt (used for equity value calculation)
--cash	No	0	Cash and equivalents
--shares	No	0	Total shares outstanding (used for per-share value)
--sensitivity	No	false	Generate sensitivity analysis matrix
--growth-range	No	auto	Growth rate range as min,max,step, e.g. 0.05,0.25,0.05
--discount-range	No	auto	Discount rate range as min,max,step, e.g. 0.06,0.14,0.02
--output	No	-	Output file path (.csv or .json)
--currency	No	""	Currency unit label, e.g. M USD, €K
--json	No	false	Output results as JSON to stdout

Use Cases

• Perform DCF valuation on a target company to assess its fair value range
• Run valuation sensitivity checks before investment decisions (how much do key assumptions need to shift to change the conclusion?)
• Quickly generate valuation matrix tables for financial modeling
• Export CSV/JSON results to integrate into larger analysis pipelines or reports

Notes

• The discount rate must exceed the perpetuity growth rate (a mathematical requirement of the Gordon Growth Model)
• This tool uses only the Python standard library — no additional dependencies required
• Cells marked N/A in the sensitivity matrix indicate parameter combinations that violate mathematical constraints