Enter Asset Data
Example Data Table
| Input | Example Value | Purpose |
|---|---|---|
| Market Price | 48 | Compares quoted price with intrinsic value. |
| Year 1 Cash Flow | 900,000 | Starts the forecast cash flow stream. |
| Discount Rate | 11% | Discounts future cash flows into present value. |
| Terminal Growth | 3% | Estimates continuing value after the forecast period. |
| Beta | 1.15 | Measures sensitivity against the wider market. |
| Annual Volatility | 24% | Supports holding period risk and VaR estimates. |
Formula Used
Discounted Cash Flow: PV = CF1 / (1 + r) + CF2 / (1 + r)^2 + ... + CF5 / (1 + r)^5
Terminal Value: TV = CF5 × (1 + g) / (r - g)
Enterprise Value: EV = PV of cash flows + PV of terminal value
Equity Value: Equity Value = Enterprise Value + Cash - Debt
Intrinsic Value Per Share: Equity Value / Shares Outstanding
CAPM Expected Return: Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)
WACC: Equity Weight × Cost of Equity + Debt Weight × Debt Cost × (1 - Tax Rate)
Value at Risk: Position Value × Annual Volatility × √(Holding Days / 252) × Z Score
Sharpe Ratio: (Expected Return - Risk-Free Rate) / Annual Volatility
How to Use This Calculator
- Enter the asset name, currency, market price, and owned units.
- Add shares outstanding, cash, debt, and five cash flow forecasts.
- Enter valuation assumptions, including discount rate and terminal growth.
- Add risk assumptions, including beta, volatility, holding days, and confidence level.
- Press Calculate to view value, risk, return, and sensitivity results.
- Use Download CSV or Download PDF to save the submitted analysis.
Understanding Asset Valuation and Risk
Asset valuation is the process of estimating what an investment should be worth today. It compares future cash flows with the return required by investors. This calculator combines discounted cash flow, market price, capital structure, and risk measures. It helps you review value and risk in one place.
Why Valuation Matters
Market price can move because of news, liquidity, sentiment, or fear. Intrinsic value is different. It is based on expected cash flows, debt, cash, discount rate, and growth. When intrinsic value is above market price, the asset may offer upside. When it is below market price, the asset may carry valuation pressure.
The tool uses five yearly cash flow estimates. Each amount is discounted to present value. A terminal value is added for cash flows after year five. Cash is added because it belongs to owners. Debt is subtracted because lenders have a claim before shareholders.
Reading the Risk Output
Risk is not only volatility. The calculator also estimates beta risk, expected return, Value at Risk, and Sharpe ratio. Beta shows sensitivity to the wider market. A beta above one means the asset may move more than the market. A beta below one suggests lower market sensitivity.
Value at Risk estimates a possible loss over the selected holding period. It uses annual volatility, position value, confidence level, and trading days. This figure is not a guarantee. It is a statistical estimate based on normal distribution assumptions. Real markets can create larger losses during stress.
Using Results Wisely
The result should support judgment, not replace it. Small changes in discount rate or growth can change intrinsic value strongly. Always test conservative, base, and optimistic cases. Compare the output with sector multiples, balance sheet quality, and business strength.
A good valuation process is disciplined and repeatable. It separates price from value. It also connects expected return with downside exposure. Use the exports for records, client notes, or portfolio reviews. Revisit assumptions when rates, margins, debt, or forecasts change. This keeps the valuation relevant and useful.
For deeper review, compare several assets with the same method. Rank them by upside, VaR, and Sharpe ratio. This creates a clearer watchlist for action. This supports stronger long term discipline.
FAQs
What does this calculator estimate?
It estimates intrinsic value, equity value, expected return, Value at Risk, conditional VaR, WACC, Sharpe ratio, upside, and margin of safety using your submitted assumptions.
What is intrinsic value per share?
Intrinsic value per share is the estimated equity value divided by shares outstanding. It helps compare the calculated fair value with the current market price.
Why must discount rate exceed terminal growth?
The Gordon growth terminal value formula needs discount rate above growth. Otherwise, the terminal value becomes unstable, negative, or mathematically invalid.
What does Value at Risk mean?
Value at Risk estimates a possible loss over a chosen period at a selected confidence level. It is a model estimate, not a guaranteed maximum loss.
How is expected return calculated?
The calculator uses the capital asset model. It adds the risk-free rate to beta multiplied by the market risk premium.
What does the Sharpe ratio show?
The Sharpe ratio compares excess return with volatility. A higher value usually indicates better return for each unit of risk taken.
Can this calculator value private assets?
Yes, if you have reasonable cash flow, debt, cash, and risk assumptions. Private assets may need extra liquidity and control adjustments.
Should I rely only on this result?
No. Use it as a structured estimate. Review assumptions, compare scenarios, check market conditions, and consider professional advice for major decisions.