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Terminus Calculator

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Calculation Type

Discounted Cash Flow Parameters

Terminal Value Calculator

Enter your parameters and click "Calculate" to see results

About Terminal Value Calculations

Terminal value (TV) represents the present value of all future cash flows beyond the projection period in a discounted cash flow (DCF) analysis.

Key Methods:

  • Perpetuity Growth Method: Assumes cash flows grow at a constant rate forever.
    TV = [FCF × (1 + g)] / (r - g)
  • Exit Multiple Method: Applies a market-based multiple to a financial metric.
    TV = Financial Metric (e.g., EBITDA) × Trading Multiple

When to Use Each:

MethodBest ForConsiderations
Perpetuity GrowthStable, mature companiesGrowth rate should be ≤ long-term GDP growth
Exit MultipleCompanies with comparable market dataUse current market multiples carefully

Professional Terminus Calculator for investment valuation. Compute terminal values using DCF, perpetuity growth & exit multiple methods. Perfect for financial analysis.

What Is It?

The Terminus Calculator is a specialized financial tool that computes the terminal value of investments using three industry-standard methods:

  1. Discounted Cash Flow (DCF): Projects future cash flows and discounts them to present value.
  2. Perpetuity Growth: Assumes cash flows grow at a constant rate indefinitely.
  3. Exit Multiple: Applies market-based multiples to financial metrics (e.g., EBITDA).

Ideal for investors, analysts, and business owners evaluating long-term investment viability.

How to Use

  1. Select Method: Choose between DCF, perpetuity growth, or exit multiple.
  2. Enter Parameters:
    • DCF: Initial cash flow, growth/discount rates, projection years.
    • Perpetuity: Final cash flow, perpetual growth/discount rates.
    • Exit Multiple: EBITDA and market multiple.
  3. Calculate: Instantly view terminal value and detailed breakdowns.
  4. Visualize: Explore interactive charts (cash flow projections, sensitivity analysis).

FAQs

Q: Which method is most accurate?
A: DCF suits stable businesses; exit multiples work best with comparable market data.

Q: Why must discount rate > growth rate in perpetuity?
A: Ensures realistic valuations (growth cannot outpace discounting indefinitely).

Q: Can I export results?
A: Yes! Download PDF reports or print directly.

Q: Are taxes included?
A: Currently focuses on pre-tax valuations. For post-tax, adjust cash flows manually.

Key Terms Explained

  • Terminal Value (TV): Present value of all future cash flows beyond the projection period.
  • Discount Rate: Rate used to convert future cash flows to present value (reflects risk/opportunity cost).
  • EBITDA: Earnings before interest, taxes, depreciation, and amortization (common profitability metric).
  • Perpetuity Growth: Assumes cash flows grow forever at a steady rate (typically ≤3%, close to GDP growth).

Why Choose This Tool?

  • Professional: Accurate calculations mirroring financial industry standards.
  • Educational: Clear methodology explanations and visual aids.
  • Adaptable: Compare methods side-by-side for robust analysis.
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