Valuation literacy · Homework calculator
Reverse DCF - side by side
Forward Gordon value from FCF₁, g, and r next to reverse implied growth from today’s market value. Educational only - not fair value.
Score guide
Plain-English read on your result
You type rates
Fees & tax - not frozen in code
Educational only
Not a broker ticket or FBR filing
Formula
Forward: Value ≈ FCF₁ ÷ (r − g). Reverse: g ≈ r − (FCF₁ ÷ Value), when r > FCF yield.
Classroom: FCF₁ 12B, g 4%, r 12% vs value 150B
Forward: 12B ÷ (12% − 4%) ≈ PKR 150B. Reverse: if the market prints 150B on the same FCF and r, implied g is about 4%. Change any input and both desks update as homework - not a target price.
Two desks, one model: a growing perpetuity FCF₁ ÷ (r − g); left: “what value if I type growth?” Right: “what growth is priced in at today’s value?” Neither side is a buy/sell call.
Forward DCF
You supply next-year free cash flow, perpetual growth, and discount rate.
Need FCF₁ > 0 and discount rate strictly above growth (r > g).
Reverse DCF
You supply today’s market value (or cap), FCF₁, and r - we solve for implied g.
Need positive market value and FCF₁.
Understand your number
What growth or discount rate would connect cash-flow homework to a value - sensitivity tool.
Typical homework range: Long-run growth above ~8%-10% in homework is often an aggressive assumption to question.
Score guide
| Range | Label | What it means for you |
|---|---|---|
| Low implied g | Market prices modest growth | Reverse solve says current value needs only gentle growth - check your FCF and discount inputs. |
| High implied g | Ambitious implied growth | Market may already price strong growth - small input changes swing output a lot. |
- Low implied g - Reverse solve says current value needs only gentle growth - check your FCF and discount inputs.
- High implied g - Market may already price strong growth - small input changes swing output a lot.
DCF homework is sensitive - one input shift changes everything.
Single-stage perpetuity is classroom math. Real filings need multi-year FCFs, net debt, and share count. Never a buy/sell call.
FAQ
Is this the same as a full Wall Street DCF?
No. It is a one-stage growing perpetuity for literacy. Real work needs multi-year FCFs, net debt, share count, and scenario ranges.
Is the result a buy or sell signal?
No. It is classroom arithmetic. Compare with filings and a licensed broker before any real order.
Continue on high-volume hubs
Stay on the high-volume path: market today → stock list → company share price → beginners / metrics - tip check when a forward arrives.
- PSX market today
Pakistan stock market today in plain words - breadth, gainers, losers.
- PSX stock list
Browse all Pakistan Stock Exchange listed companies by name or sector.
- KSE 100 today
Educational constituent board - not the official index level on psx.com.pk.
- PSX gainers today
Biggest % rises among ordinary listed shares - homework, not a buy list.
- PSX losers today
Biggest % falls on the board. A drop is not an automatic bargain.
- How to invest in the stock market in Pakistan
Educational path: words, today’s board, one company, then a licensed broker - not a buy list.