DCF dates, mid-year and stub periods

Methods and settings

Select four independent year settings

First cash-flow year begins the included schedule. Explicit forecast through labels the explicit horizon. Terminal value after sets the end date from which terminal value is discounted. Terminal metric year selects the operating anchor. If the terminal date is later than the explicit end, intervening model years remain included as bridge cash flows. This prevents an unexplained gap in modeled cash generation.

Timing and amount are separate choices

The discount date uses actual calendar dates and ACT/ACT year fractions. Year-end discounts each operating cash flow from its period end. Mid-year moves it to the midpoint of the remaining period. Prorate remaining first year separately multiplies the cash-flow amount by the remaining fraction. Turning proration off retains the full-year amount while the selected discount timing still applies.

Check a partial first year

If roughly half of a 100-unit first-year FCFF remains at the valuation date, proration includes roughly 50. Under mid-year timing, that remaining flow is discounted from approximately the midpoint of the remaining half-year. The exact result follows the actual dates, including leap years. Do not automatically halve the input in the model and enable proration again.

Terminal timing and errors

Terminal value is discounted from the selected terminal period end even when operating cash flows use mid-year timing. Its metric anchor can be a different year. The discount date must precede the terminal end, and every included cash-flow period must end after the discount date. First year must not exceed explicit end, and terminal year must not precede it. The native controls select annual model years; they are not an arbitrary dated-cash-flow editor.