Fictional case · £m unless stated · Year-end valuation · No live data. This local tool does not transmit assumptions. Excel and this page require a manual assumptions hand-off; there is no live synchronisation.
Illustrative assumptions loaded.
Compare two terminal-value methods
Gordon enterprise value—
Exit-multiple enterprise value—
WACC—
The exit multiple is applied to year-five EBITDA. Gordon growth rebuilds year-six working-capital investment at the terminal growth rate. Positive sustainable terminal cash flow and WACC greater than growth are required.
Growth and operating profit
Revenue and EBITDA in £m. Both respond to the selected five-year driver path.
Profit versus cash conversion
EBITDA margin and unlevered cash-flow margin. Investment and cash tax help explain the gap.
What a different required return changes
Gordon enterprise value (£m) across seven WACC assumptions, holding the selected operating forecast and terminal growth fixed. Invalid points are omitted. This is a sensitivity, not a forecast.
1. Set the starting point
How is WACC calculated?
Cost of equity = risk-free rate + relevered beta × equity risk premium. WACC combines cost of equity and after-tax debt cost using target market-value capital weights. Peer beta is unlevered, the median is selected, then relevered. The optional adjustment is added to the relevered beta.
2. Explain your operating forecast
Edit the selected case's five-year path. Rates below are percentages. Changing cases preserves edits to the other cases.
Before changing growth, ask what changes in price, volume or mix. Before changing margin, explain capacity, competition and input costs. Higher growth may also require more working capital and capital expenditure.
Free cash flow (£m)
One shared scale. Negative cash flow remains negative.
Enterprise to equity (£m)
Subtract financing and other claims; add cash and non-operating assets. Avoid counting the same claim twice.
3. Trace the calculation
Cash tax = max(EBIT, 0) × tax rate. No tax-loss carryforwards are modelled. NWC investment is incremental revenue × the selected ratio; this is not total NWC as a percentage of sales.
Operating cases
Each case uses its own five-year operating path. The capital-market and equity-bridge assumptions are shared.
Try explaining the difference
Which assumption changes value most? Does the change come from operating cash flows or the rate used to discount them? Could higher interest rates affect both?
Why might an exit-multiple valuation disagree with Gordon growth? Does the terminal reinvestment support the assumed growth?
Sensitivity describes alternative assumptions, not probabilities or a prediction of returns.
4. WACC and terminal-growth sensitivity
Enterprise value (£m). Darker shading indicates a higher value, not a better outcome. WACC varies ±3 percentage points; growth varies ±1.5 percentage points. The outlined centre uses the selected assumptions. Unavailable values are shown as —.
5. Transfer assumptions
From Excel: copy the populated Key and Value rows on HANDOFF and paste below. Decimal rates must be copied at their full displayed precision. You can also paste the JSON exported here. Import validates the complete schema before applying it.
No import this session.
Returning changes to Excel
The TSV export includes the destination sheet and cell for each editable value. Paste values into those original input cells, not the formula-linked HANDOFF sheet. Keep rates as decimals, then recalculate Excel and compare the selected case's WACC, enterprise value and share value. No macros or automatic workbook writer are included. For a changed historical year, also set CONTROL C7 to 31 December of that year.