Tool 道具 · Valuation lab
Build a range, not a target
Kaiju Beverage Co. (fictional): $1,000M revenue, $200M net debt. Choose three assumptions and watch the equity value move, then read what the model simplifies.
- Next year free cash flow
- $95M
- Enterprise value: FCF ÷ (discount − growth)
- $1,890M
- Less net debt (assumed)
- −$200M
- Equity value
- $1,690M
At this margin, equity ranges from $718M to $4,660M. From your case, the result is most sensitive to growth, then discount rate, then margin. Write down which inputs deserve the range. That sentence is the deliverable.
| 2% growth | 5% growth | 8% growth | |
|---|---|---|---|
| 8% disc | $1,330M | $2,950M | n/a |
| 10% disc | $948M | $1,690M | $4,660M |
| 12% disc | $718M | $1,150M | $2,230M |
n/a · Undefined: perpetual growth must stay below the discount rate, or the formula divides by zero or a negative number.
One year of cash flow grown forever, one discount rate, net debt as the only bridge item. There is no explicit forecast, so all of the value is terminal value. A full DCF forecasts several years of cash flow, then a terminal value, then the whole bridge. The table can't fix weak assumptions: explain which inputs deserve the range.