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Discounted-Cash-Flow-Analysis: Your Complete Guide with Examples

Valutico

the multiple based or ‘ comps ’ (comparable company analysis) approach. Well, the short answer is after that forecast period where we estimate each year’s cash flows then discount them, we add a single number at the end to account for all the theoretical years in the future, called the Terminal Value (TV). The first is 1.

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5 Simple Sense-Checks That Vastly Improve Your Business Valuation

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One critical component of the terminal value is the perpetual growth rate. the value of all its shares added up). The perpetual growth rate is an assumption of the annual growth rate until the end of time. . You can find the long term inflation rate on websites like TradingEconomics.com.