The Discounted Cash Flow worksheet calculates two present values (high and low) using two discount rates (low and high). The lower the rate, the higher the present value.

„If you know the rates you want to use, enter them into the Low and High input cells on the Discount Rate line.

„If you're not sure what discount rates to use, select a Company Risk Level setting, then click on the Calculate Now button. BESWeb will set the rates automatically and apply them to the worksheet.

Discount Rate Inputs

By default earnings for the current year are set to Discretionary Income calculated on the Earnings worksheet. You can overwrite this value by entering a new number in the Current Year input cell in the Earnings column. Click on the Calculate Now button to update the worksheet.

Current Year Earnings Input

Earnings for the projected years are calculated by applying annual growth rates. Each year's rate is linked to the previous year. After you enter a rate or rates, click on the Calculate Now button to update the calculations. For example, to apply an eight percent growth rate for the first three years, then three percent for the remaining years, enter "8" in the Projected Y1 Growth input cell and "3" in the Projected Y2 cell, then click on the Calculate Now button. BESWeb will turn the numbers in the two cells that you changed green, and leave the numbers in the input cells that still contain formulas black. This makes it easy to see which inputs you have changed and which are being calculated.

Projected Years Growth Inputs

To complete the Discounted Cash Flow method, enter a value for Net Excess and Non-Operating Assets in the only input cell in the Indicated Value section. Click on the Calculate Now button to update the calculations and see the final results.

Net Excess and Non-Operating Assets Input