what is terminal value?

[daisy]

I’ve been reading about business valuation and came across the term Terminal Value, but I’m not entirely sure what it means and how it’s used. I understand that it’s an important part of a Discounted Cash Flow (DCF) analysis, but how is it calculated? And what does it represent in the context of valuing a company?

 

[Rick_Grimes]

Terminal value is the estimated value of a business or investment at the end of a forecast period, used to calculate its total worth in financial models.

 

[Jarwish]

Terminal value is the estimated value of an investment, project, or company at the end of a forecast period. It represents future cash flows beyond projections, often calculated using the perpetuity growth model or exit multiple method in financial analysis and valuation.

 

[Emly]

Terminal value is the estimated value of a business or investment at the end of a forecast period, representing its long-term worth.

 

[Mayank]

Terminal value is the estimated value of an investment, business, or project at the end of a forecast period. It captures all future cash flows beyond that period, assuming a steady growth rate. Often used in valuation models like DCF, it helps determine the total worth of a long-term investment.

 

[peterkavinsky]

Terminal value is the estimated value of a business or project at the end of a forecast period, used in discounted cash flow (DCF) analysis to account for all future cash flows beyond the projection.

 

[nikhilrajoria]

In finance, it’s the estimated value of a business beyond the forecast period, often used in discounted cash flow (DCF) models.

 

[Lucky]

Terminal value is the estimated value of an investment, project, or company at the end of a forecast period in financial modeling. It accounts for all future cash flows beyond the projection horizon. Terminal value helps determine the total present value in discounted cash flow (DCF) analysis and is essential for long-term business valuation.