Valuation models and scenario analysis

Valuation sits at the center of the platform. Rather than a single discounted cash flow calculation, the current release supports three approaches to intrinsic value, all built on the same financial data.

The Discounted Cash Flow model projects a company’s future free cash flows and discounts them to present value. Every assumption behind the projection can be edited, either as one parameter across the whole forecast or year by year: growth, margins, reinvestment, and terminal value. For the discount rate, three methods are available: CAPM, a simplified cost of equity estimate, and the Fama-French three-factor model.

The Residual Income model takes a different route. Instead of forecasting cash flows, it starts from the company’s book value and adds the value created above the cost of equity each period. A firm only builds value when it earns more than the return its shareholders require, and that excess is what the model captures. This tends to be more stable than a DCF for financial companies and for firms whose cash flows are hard to project, since more of the estimate rests on the current balance sheet than on distant forecasts.

Sensitivity analysis then shows how the valuation responds to changes in the key inputs, making clear which assumptions drive the outcome and how much room sits around the central estimate.

Scenario analysis extends this to the market environment. You can define conditions such as a recession, a rate hike, or a demand shock and see how the valuation shifts under each. Scenarios can be saved, and any one can be set as the working case for a company.

The full model, assumptions and outputs included, can be exported to Excel.

Cash flow statement parsing was also improved, with more reliable matching of operating, investing, and financing line items across filing formats.