Valuation using discounted cash flows<\/a> on Wikipedia.<\/p>\n\n\n\nDoing your own valuation:<\/strong><\/p>\n\n\n\n\n- Estimate generation: <\/strong>If the company does not have any estimates readily available, you can generate them by pressing the Generate Estimates<\/strong> button. You can either choose to generate all estimate years or only some of them (see section ‘4. Final adjustments’ why the latter can be of use). This will automatically generate sophisticated estimates for each row on income statement and balance sheet. These estimates are usually projections that are based on historical data. This typically takes between 30 seconds and 1 minute.<\/li>\n\n\n\n
- Making your own estimations in the ‘Valuation’ tab:<\/strong> When you have estimates in place, you can change these estimates to suit your personal views of the company. This can be done by clicking the Change estimates <\/strong>button. Some key figures, such as net sales and EBIT (Earnings before interest and taxes), can be changed directly from the Valuation tab and this is indicated by an underlining below the figures such as 10,230<\/span>. Our Valuation tool is dynamic and as such any change to a figure will automatically reflect the changes to other values that are dependent on it. For example, by changing the net sales or its growth, the absolute EBIT will be adjusted so that the EBIT-% stays the same relative to the updated net sales. Many other parameters will be updated similarly if they are relative to net sales.<\/li>\n\n\n\n
- Making your own estimations in the ‘Financial Statements’ tab<\/strong>: Most of the rows in the DCF valuation are just constituents of different rows or groups of rows from the financial statements and thus they cannot be changed directly from the DCF calculation. Therefore changing, e.g., the row “- Paid taxes” requires you to change the values in “Income taxes” row on the ‘Financial statements’ tab. After changing the row, it will automatically update the corresponding row in DCF valuation. Other rows in the DCF valuation follow the same logic.<\/li>\n\n\n\n
- Final adjustments:<\/strong> If you have changed the estimates only for the first few years, you can then generate new estimates from that year forward by pressing the Generate estimates <\/strong>button and choosing the years you want to keep so that they won’t be generated again. This will align the rest of the estimation years to be calculated based on your inputted estimates.<\/li>\n\n\n\n
- Saving your estimates: <\/strong>After you are satisfied with your overall estimates, you can click the Save…<\/strong> button. Write the name of your scenario and choose whether you want the estimates to be public (seen by all users) or hidden (seen only by you) and click Save<\/strong>.<\/li>\n\n\n\n
- Downloading a valuation report:<\/strong> You can also generate an automatic valuation report based on your estimate changes. Click on the Generate report <\/strong>button and choose ‘Valuation report’ from the ‘Report:’ dropdown menu. From pages 8-9 you can find more information on the DCF calculation including a sensitivity analysis based on your estimates.<\/li>\n<\/ol>\n\n\n\n