Valuation Models
Interactive financial models to value companies using different methodologies
AI Valuation Assistant
Growth Assumptions
The model assumes that growth rates will decline over time as the company matures. Initial high growth rates typically moderate toward industry averages in later years.
Margin Assumptions
EBITDA margins are assumed to remain constant throughout the projection period. In reality, margins may expand with scale or contract due to competition. Consider adjusting this assumption for more mature companies.
Terminal Value
Terminal value represents the company's value beyond the explicit forecast period. This model uses an EBITDA multiple approach, which assumes the company will be valued at a multiple of its final year EBITDA.
Discount Rate
The discount rate represents the required rate of return and accounts for the time value of money and the risk of the investment. Higher risk companies should use higher discount rates.
DCF Model Limitations
- Highly sensitive to input assumptions, especially long-term growth and discount rates
- Does not account for potential changes in business model or disruption
- Simplifies complex business dynamics into a few financial metrics
- Terminal value often represents a large portion of the total valuation