Valuation Engine

Build beta from the comps

Private targets do not trade, so there is no stock return series to regress. Paste up to eight public comps. The engine fetches five years of monthly prices, regresses each against the S&P 500, and unlevers using your capital structure inputs. The average asset beta is the industry-level operating risk measure used downstream.

β_equity = Cov(R_stock, R_market) / Var(R_market)
β_asset  = β_equity / (1 + D/E)

CAPM, unlevered

The unlevered cost of capital is what we discount every unlevered cash flow at. Tax shields get discounted at the same rate, consistent with the simplified unlevering choice above.

r_a = R_f + β_asset × MRP
    = 4.25% + 0.85 × 5.5% = 8.93%

Five-year UFCF build

Unlevered free cash flow is the cash the business generates before any financing decisions. Interest is deliberately absent. APV values the financing separately through the tax shield line.

UFCF = EBIT × (1 − t) + D&A − Capex − ΔNWC

Assemble the firm value

The terminal value captures everything beyond the explicit forecast. Gordon Growth requires a terminal growth rate that sits below the long-run growth of the economy. Mid-year convention reflects that cash flows arrive throughout the year, not at year-end.

TV = UFCF_6 / (r_a − g)

Max price per buyer

The standalone number tells you what the business is worth alone. The deal is what it is worth to a specific acquirer, because the synergies sit on top and synergies are acquirer-specific. The three archetypes below each carry a different synergy story.

Max Price = Standalone + PV(Synergies) × Capture %

Two-variable sensitivity

Every input is a guess. Some guesses matter more than others. Pick two assumptions and see how the APV enterprise value moves across a range. Darker means higher.

What the comps trade at

A good DCF should survive a multiples check. When the regression runs, the engine pulls each comp's enterprise value, EBITDA, and revenue, and computes the implied trading multiples. Apply that comp range to your target's numbers and triangulate.

EV         = Market Cap + Total Debt − Cash
EV / EBITDA = EV / EBITDA
EV / Revenue = EV / Revenue
Target EV (comp) = Target EBITDA × median(EV / EBITDA of comps)

What the distribution looks like

A single APV number treats every assumption as if you knew it exactly. You don't. For each of the five inputs below, give a pessimistic, most-likely, and optimistic value. The engine runs ten thousand trials over triangular distributions and shows the distribution of enterprise values that result.

All methods on one axis

The canonical valuation summary. Every method you have, laid on the same value scale, so the range of outcomes reads in a single glance. The dashed line is the deterministic APV. Where the bands cluster is where the answer lives.