Calculate IRR, NPV, DCF, WACC, CAPM, and other essential investment metrics. Professional free tools for investment analysis and valuation.
Sound investment decisions require rigorous analysis. Whether you're evaluating stocks, analyzing capital projects, or valuing a business acquisition, these calculators provide the quantitative foundation for informed decision-making.
Understanding metrics like IRR, NPV, and WACC helps you compare investment opportunities on an apples-to-apples basis. These tools use the same methodologies employed by professional investors, investment banks, and corporate finance teams.
From simple payback period analysis to complex DCF valuations, these calculators scale with your analytical needs and help you make more confident investment decisions.
IRR (Internal Rate of Return) is the discount rate that makes the Net Present Value of all cash flows equal to zero. It represents the annualized return on an investment. If IRR exceeds your required rate of return (hurdle rate), the investment is generally considered attractive. For example, an IRR of 15% means the investment returns 15% annually.
NPV is calculated by discounting all future cash flows back to present value and subtracting the initial investment. The formula is: NPV = Sum of (Cash Flow / (1 + discount rate)^year) - Initial Investment. A positive NPV means the investment creates value; negative NPV means it destroys value.
Discounted Cash Flow (DCF) valuation estimates a company's or asset's intrinsic value by projecting future free cash flows and discounting them to present value. It's commonly used for: valuing companies for M&A, analyzing stock investments, evaluating capital projects, and real estate investments.
WACC (Weighted Average Cost of Capital) = (E/V x Cost of Equity) + (D/V x Cost of Debt x (1 - Tax Rate)). E = Equity value, D = Debt value, V = Total value (E+D). Cost of equity is typically calculated using CAPM. WACC represents the minimum return a company must earn to satisfy all its stakeholders.
CAPM (Capital Asset Pricing Model) calculates expected return as: Expected Return = Risk-Free Rate + Beta x (Market Return - Risk-Free Rate). The risk-free rate is typically the 10-year Treasury yield. Beta measures the stock's volatility relative to the market. The (Market Return - Risk-Free Rate) is called the equity risk premium.
P/E (Price-to-Earnings) ratios vary significantly by industry and growth rate. The S&P 500 average is around 20-25x. High-growth tech companies often trade at 30-50x or higher. Value stocks might trade at 10-15x. Compare P/E to the industry average and historical range, not just absolute numbers. Also consider the PEG ratio (P/E divided by growth rate).