Payback Time Calculator
If you owned the whole company and pocketed every dollar of free cash it produced, how long until you had your money back? Eight years is the line this model draws. The page works it both ways — the price that gets you there, and the years you get at a price you name.
Your numbers
Operating cash flow minus capital expenditure, divided by diluted shares. A US filing reports both lines on the cash-flow statement.
Cash flow is lumpier than earnings, so take a long average rather than last year's figure.
Eight years is the default. Sixteen is widely treated as fair value, which is exactly the point — this model wants twice as good as fair.
Pre-filled with an example so the page shows a real calculation. Change any number.
Result
Payback price over 8 years of cash flow
$51.58
The cash per share the business hands you over the horizon, added up. That total is what you can pay and still be whole by the end of it.
Enter a free cash flow per share above zero to see a price.
Year by year
| Year | FCF / share | Cumulative |
|---|---|---|
| 1 | $4.51 | $4.51 |
| 2 | $4.96 | $9.47 |
| 3 | $5.46 | $14.93 |
| 4 | $6.00 | $20.93 |
| 5 | $6.60 | $27.53 |
| 6 | $7.26 | $34.80 |
| 7 | $7.99 | $42.79 |
| 8 | $8.79 | $51.58 |
Year 1 already carries one year of growth, matching the app's calculation exactly.
Or start from a price
Name a price and the same series runs until it is paid off.
At that price, the cash pays you back by year 7 . At that price, payback takes more than 40 years. Needs a price above zero, and the two figures above.
Derived here from the same series as the table above, read backwards. The app reports the payback price, not this figure.
Stop retyping this
A watchlist in the app pulls EPS, free cash flow and growth rates straight from the filings, re-runs all three models whenever a new one lands, and keeps the history so you can see what changed. Coverage today is US-listed stocks.
Free plan. No card.
An educational tool. The output is arithmetic on figures you entered — not a recommendation, not a valuation of any particular company, and not a view on whether a price will move. A cheap price and a good business are different things.
How the number is built
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Start from cash, not earnings.
Earnings pass through accrual accounting on the way to the page. Free cash flow is what is left after the business has paid to keep itself running — it is the number an owner could actually take home.
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Grow it, then collect it.
Each year's cash is the year before grown by your rate, and the running total is what the business has handed you so far. Growth is applied before the first year is banked, so year 1 is already one year in.
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Stop at the horizon.
The running total at year eight is the payback price. Pay less and you are whole sooner. Pay more and you are lending the business your money for longer than this model is willing to wait.
The defaults, and why
- Eight-year horizon. The default, and editable above — sixteen years is the conventional fair-value line, so eight is a deliberately harder test.
- Growth applied before the first collection, so year 1 is already compounded once. This matches the app on purpose; the two surfaces have to agree.
- No terminal value. The business is credited with nothing after the horizon, which is severe and meant to be.
- No discounting. Adding it would lower every year's contribution and raise the price, making the answer softer than the model intends.
What this will not do
- One growth rate held for eight years is a strong assumption. Cash flow rarely behaves that way, which is why the model asks for a long average instead of a recent figure.
- Maintenance and growth capital expenditure are not separated here. A business spending hard to expand will look worse than it is.
- It will not warn you that the cash is about to stop. Nothing in the arithmetic knows what the business is.
- Share count is assumed flat. Heavy dilution ahead makes per-share cash flow a moving target.