Estimating the Terminal Value

By Leigh Tomlinson

Tuesday 31st May 2022

An estimate of terminal value is critical in financial modelling particularly as a firm or project could potentially have an infinite life.

Forecasting is only useful to a certain point beyond which assumptions and projections are exposed to a number of risks. It is therefore important to understand how you can mitigate this through the use of terminal value and the ways in which this can be calculated.

This one hour webinar will guide you through the high level concepts of terminal value explaining what it represents and how it should be considered in your valuations and return computations.

Both the multiple and perpetuity method for calculating terminal value will be discussed along with benefits and pitfalls of each as well as a demonstration of best practise financial modelling techniques within a live case study workbook which will be available as a free download..

 Learning objectives:

  • Understand the concept of terminal value and how this can benefit your forecasting & analysis
  • Learn best practise financial modelling techniques on incorporating terminal value calculations into your model
  • Appreciate how to calculate terminal value through both the multiple & perpetuity calculation method and gain an understanding of the benefits and pitfalls associated with each of these
  • Gain insight into how terminal value should be considered in your return and valuation computations, ensuring that this is correctly reflected in any net present value calculations