How to Enter a Discounted Cash Flow Formula in WPS Spreadsheets
Question details
The user needs to enter formulas for calculating the present value of projected cash flows and terminal value in a discounted cash flow model.
- Product
- WPS Spreadsheets
- Device & OS
- not provided
- Scenario
- The user is organizing forecast years, cash flows, a discount rate, and terminal value in a spreadsheet for investment valuation.
- Observed behavior
- The goal is to calculate each discounted cash flow, discount the terminal value, and add the present values to estimate the investment value.
Create clearly labeled cells for the period number, projected cash flow, discount rate, terminal value, and present value. Confirm that the discount rate is entered as a percentage, such as 10%, and that each period number matches the forecast year or time interval.
Enter discounted cash flow and terminal value formulas in WPS Spreadsheets
Use this method when you want to calculate each forecast period separately and include the discounted terminal value in the final DCF valuation.
A DCF model discounts each future cash flow back to its present value using the discount rate and the relevant period number. Absolute references keep the discount-rate cell fixed when you copy the formula down the worksheet.
Open WPS Spreadsheets and create columns for Year or Period, Cash Flow, Present Value of Cash Flow, and Terminal Value. For example, place the period number in A2, the cash flow in B2, and the discount rate in F2.
Select the first cell in the Present Value column and enter =B2/(1+$F$2)^A2, then press Enter. This discounts the cash flow in B2 using the fixed discount rate in F2 and the period in A2.
Select the formula cell, drag its fill handle down, or use Home > Fill > Down to apply the formula to the remaining forecast periods. Check that the cash flow and period references change while $F$2 remains fixed.
In the terminal value present-value cell, enter =TerminalValue/(1+DiscountRate)^LastYear using actual cell references. For example, if the terminal value is in F3, the discount rate is in F2, and the last period is in A6, enter =F3/(1+$F$2)^A6.
Select the total valuation cell and choose Home > AutoSum, or enter =SUM(C2:C6)+F4 if discounted cash flows are in C2:C6 and the discounted terminal value is in F4.
Build a Discounted Cash Flow Model in WPS Spreadsheets
WPS Spreadsheets lets you organize forecast periods, enter DCF formulas, copy formulas across a model, and total discounted cash flows with familiar spreadsheet tools. You can save the finished valuation in a format that opens smoothly in Microsoft Excel.
- 1. Open a spreadsheet: Launch WPS Office, select Spreadsheet, and open a blank workbook or an existing Excel-compatible model.
- 2. Create labeled input cells: Enter the period numbers, projected cash flows, discount rate, and terminal value in separate labeled cells.
- 3. Enter the DCF formulas: Use =CashFlow/(1+DiscountRate)^Year for each forecast period and discount the terminal value using the last period.
- 4. Total the present values: Use the AutoSum button on the Home tab or enter a SUM formula to add the discounted cash flows and discounted terminal value.
Frequently Asked Questions
What formula calculates the present value of a cash flow in WPS Spreadsheets?
Use =CashFlow/(1+DiscountRate)^Year. For example, if the cash flow is in B2, the discount rate is in F2, and the period is in A2, enter =B2/(1+$F$2)^A2.
How do I keep the discount rate from changing when I copy the DCF formula?
Use absolute references around the discount-rate cell. If the rate is in F2, write $F$2 in the formula, as in =B2/(1+$F$2)^A2, before dragging the formula down.
How do I discount terminal value in a DCF model?
Divide the terminal value by the discount factor for the final forecast period. For example, if terminal value is in F3, the discount rate is in F2, and the last period is A6, enter =F3/(1+$F$2)^A6.
How do I calculate the final DCF valuation?
Add all discounted forecast cash flows and the discounted terminal value. You can enter a formula such as =SUM(C2:C6)+F4, replacing the ranges with the cells in your worksheet.
Can WPS Spreadsheets open an Excel DCF model?
Yes. WPS Spreadsheets can open and edit common Microsoft Excel XLS and XLSX files, allowing you to review or continue working on a DCF model.
