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 DCF Valuation Calculator: Design Summary and Purpose

The DCF Valuation Calculator is an interactive web application built with Gradio, designed to estimate a company’s intrinsic value using Discounted Cash Flow (DCF) analysis. It provides investors and financial analysts with a transparent, visual, and easy-to-use tool for valuing businesses based on future cash flow projections.

Development Summary

  • Interface: Built using Gradio for a clean and responsive user interface with live interactivity and example presets.

  • Core Logic: Implements standard DCF methodology:

    • Projects Free Cash Flows (FCF) over a defined number of years.

    • Calculates each year’s Present Value (PV).

    • Computes the Terminal Value using a perpetuity formula.

    • Sums PVs and terminal PV to estimate Total Intrinsic Value.

  • Outputs:

    • A forecast table (FCF and PV by year).

    • A matplotlib chart for FCF trends.

    • A summary report with key figures.

  • Input Parameters:

    • Initial FCF

    • Annual Growth Rate

    • Discount Rate

    • Terminal Growth Rate

    • Number of Forecast Years

Purpose

This tool serves to:

  • Educate users on the mechanics of DCF valuation.

  • Provide quick and accurate intrinsic value estimates.

  • Enable investors to analyze how changing assumptions (growth, discount rates, etc.) affect valuation.

  • Offer a simple gateway into corporate finance concepts with visual and tabular feedback.

The calculator is ideal for equity researchers, students, and finance professionals who want a no-code way to explore valuation scenarios interactively.