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DCF Verification

How to Verify Our DCF Valuation

This walkthrough shows you how to replicate InvestViable's DCF output in your own spreadsheet using the same inputs and the same methodology. Every formula is documented. Every input is visible on the platform. If the numbers match, you know the analytical engine is sound. The guide covers the DCF (Cash Flow Valuation) method step by step. For EBITDA Multiple and Earnings Fair Value, concept-level overviews are included with links to the relevant Education sections. This guide assumes you know what a DCF is and have built one before.

The verification steps

How Does the DCF Verification Work?

Open a spreadsheet alongside the platform. Pick any stock. Note the base DCF fair value displayed under "Cash Flow Value." Then follow the four steps on the right. At each step, you compare your spreadsheet number to the platform's output. Use a large-cap stock (AAPL, MSFT, GOOGL) for your first verification.

Calculate Historical Free Cash Flow

Pull Operating Cash Flow and Capital Expenditures from the company's most recent annual filing and the year five years prior. Free Cash Flow = Operating Cash Flow minus Capital Expenditures. These two data points (CF_0 and CF_5) are your anchors. Find them on the stock page under Key Figures, or in the SEC filing directly.

Discount to Present Value

Discount each projected cash flow by the expected rate of return: CF_N / (1 + r) ^ N. Calculate the terminal value using the perpetual growth model, then discount it back to present value: Terminal Value / (1 + r) ^ 5. The expected rate of return (r) is displayed on the valuation tool page. The perpetual growth rate is 2% in the base model.

Common Differences

Why Might Your Number Differ?

If you followed every step and your final number differs from the platform's output, these are the most common reasons. None of them indicate an error in the methodology. If your number is within 5% of ours using the same inputs, the methodology matches. If it diverges by more than 10%, work backwards through the steps. Check the inputs first, then the assumptions, then the net debt components. If you find a genuine error in our calculations, contact us. We want to know.

Data Timing

Invest Viable uses data from Financial Modeling Prep (FMP), which updates on its own schedule tied to SEC filing dates. If you are pulling from Yahoo Finance, Morningstar, or directly from EDGAR, the data may reflect a different filing or a different reporting period.

Rounding and Precision

The platform carries full precision through all eight calculation steps and rounds only at display. If your spreadsheet rounds at each intermediate step, small differences compound. A 1-3% variance in the final output from rounding alone is normal.

What This Proves

What Does a Matching Result Tell You?

If you followed the steps and your spreadsheet matches the platform's output, you have verified the analytical engine behind every valuation on Invest Viable. The same methodology runs across 3,000+ US stocks simultaneously.

Methodology Confidence

When the numbers match your spreadsheet, you know the platform uses the same methodology you would build yourself. Trust earned through verification, not marketing.

Time Savings

The verification proves the output is equivalent to your manual work. Every future analysis can use the platform instead of rebuilding from scratch.

Other Methods

Extending the Verification to EBITDA and Graham

EBITDA Multiple Verification

The EBITDA Multiple formula is simpler: Enterprise Value = EBITDA x Multiple. Then subtract net debt and divide by shares outstanding. The key variable is the EBITDA multiple, visible on the valuation tool. The net debt adjustment is identical to the DCF method. If your EBITDA figure matches and you use the same multiple, the output should match within rounding.

Earnings Fair Value

The base version uses a multi-step normalized EPS calculation designed to smooth cyclical fluctuations, one-time charges, and accounting anomalies. The normalized EPS is then applied to Graham's intrinsic value formula. This is more involved to replicate, but the same verification logic applies: match each input, check each intermediate step, and identify where any divergence occurs. See the Earnings Fair Value Education section for the full methodology.

Education

Learn the methods behind every number.

Education

Learn the methods behind every number.

How to Verify Our DCF Valuation

How Does the DCF Verification Work?

Calculate Historical Free Cash Flow

Compute Growth Rate and Project Forward

Discount to Present Value

Adjust for Net Debt and Compare

How is the DCF Fair Value Calculated?

Why Might Your Number Differ?

Data Timing

Rounding and Precision

What Does a Matching Result Tell You?

Methodology Confidence

Time Savings

Extending the Verification to EBITDA and Graham

EBITDA Multiple Verification

Earnings Fair Value

Share Count

Fiscal Year Alignment

Net Debt Components

Full Transparency

Error Detection