Most of the answer is the terminal value
The standard DCF forecasts five years explicitly and treats everything after as one perpetuity. Split the result, though, and the five years are often about 30% of it while the perpetuity is 70%. The single terminal growth figure typed in at the end moves the answer more than the years anyone worked on.
This tool prints that as a share. Seeing 70% or 80% changes how much weight the result deserves. Lengthening the forecast to ten years lowers the share, but it does so by taking on ten years of forecasting uncertainty, so the problem moves rather than disappears.
Terminal growth has to stay below the discount rate
The terminal denominator is the discount rate minus perpetual growth. As the two converge the denominator approaches zero and the value explodes; at equality it divides by zero; beyond it the formula returns a negative number. This tool refuses to answer and says why.
It looks like an arithmetic problem but it is an economic one. A company growing faster than its cost of capital for ever eventually becomes larger than the economy. Convention therefore keeps terminal growth at or below long-run growth or inflation, usually 1–3%.
Nudging terminal growth from 2% to 3% shows how sensitive this is. At a 9% discount rate the denominator falls from 7% to 6% and the terminal value rises about 17%. One percentage point moves the valuation by more than ten, so this field is not one to fill in casually.
Where the free cash flow comes from
The base figure is built from two lines of the cash flow statement: operating cash flow less capital expenditure — purchases of property, plant and equipment. It comes from there rather than from net income because what a DCF values is cash available, not accounting profit.
Choosing the base year needs care. A year with unusually heavy capital spending, or a one-off swing in working capital, is not a normal year — and that single figure is the starting point for the entire projection. A three-year average, or an adjusted figure, is the safer input.
What this tool returns is an enterprise value. Getting to an equity value means subtracting net debt — take it from the enterprise value calculator, deduct it here, and divide by the share count for a per-share figure. Comparing an enterprise value directly with a market capitalisation counts the debt twice or not at all.
The honest direction is backwards
Asked "what is this company worth", a DCF answers with a function of its own assumptions: adjust the growth and discount rates a little and almost any figure is reachable. So the question gets turned around — what would have to be true for today's price to be right?
Add net debt to the current market cap to get the enterprise value the market is paying, then find the growth or discount rate that produces it. Whether that assumption is acceptable is something you can actually judge. If today's price requires 25% growth sustained for a decade, the decision is no longer about valuation but about whether this company can grow like that — a far more tractable question.