## How to Use the DCF Formula for Startup Valuations

The Discounted Cash Flow (DCF) formula is used to estimate the value of a startup based on its expected future cash flows. Here's how you can use the calculator:

**Annual Revenue ($):** Enter the current annual revenue of your startup.
**Growth Rate (%):** Enter the expected annual growth rate of your revenue. This should be in percentage.
**Profit Margin (%):** Enter the profit margin of your startup. This should also be in percentage.
**Discount Rate (%):** Enter the discount rate. This rate is used to discount future cash flows to their present value.
**Number of Years:** Enter the number of years you want to project into the future.

Click the "Calculate Valuation" button to get the estimated valuation of your startup based on the DCF formula.

### Example

Let's assume the following values for your startup:

- Annual Revenue: $500,000
- Growth Rate: 10%
- Profit Margin: 20%
- Discount Rate: 12%
- Number of Years: 5

Using these values, the calculator will project the future cash flows for the next 5 years, discount them to their present value, and sum them up to estimate the startup's valuation.

### How to Calculate Key Metrics

**Growth Rate (%):** This can be calculated as `((Current Year Revenue - Previous Year Revenue) / Previous Year Revenue) * 100`

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**Profit Margin (%):** This is calculated as `(Net Profit / Revenue) * 100`

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**Discount Rate (%):** The discount rate can be based on the cost of capital or desired rate of return. It reflects the risk of future cash flows.