Terminal Value: 2 Methods Every Finance Professional Should Know Terminal Value (TV) estimates a business’s value beyond the explicit forecast period in a DCF model. It can account for a significant portion of total valuation. 1. Perpetuity Growth Method Assumes cash flows grow at a constant rate forever. Formula: TV = FCFₙ₊₁ / (WACC − g) Best suited for mature businesses with stable, predictable cash flows. 2. Exit Multiple Method Assumes the business is valued using a market multiple at the end of the forecast period. Formula: TV = Terminal Metric × Exit Multiple Common multiples: EV/EBITDA, EV/EBIT and P/E. What should you remember? The perpetuity growth rate must be below WACC for this formula to work. Exit multiples should reflect comparable companies and market conditions. Always test how changes in WACC, growth rates and multiples affect valuation. 💡 Key takeaway: Terminal Value can drive a large part of a DCF valuation, so choosing reasonable assumptions is critical. Cash Flow Statement Premium Resource lnkd.in/dhScq7gM lnkd.in/d3H2sV_j lnkd.in/d5CSD2rV

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📊 Pricing of Swaps: 8 Key Steps to Understand An interest rate swap exchanges fixed and floating cash flows. Its value changes as market interest rates change. Here’s how swap pricing works: 🔄 Understand the Swap: Identify the notional amount, tenor, payment frequency and fixed/floating legs. 📈 Gather Market Data: Use discount curves, forward rates and market swap rates. 💹 Project Floating Cash Flows: Estimate future payments using forward rates. 🧮 Calculate Fixed Cash Flows: Apply the agreed fixed rate to each payment period. 💰 Discount Cash Flows: Convert future payments into present values. ⚖️ Calculate Swap Value: PV of the received leg − PV of the paid leg. 🤝 Settle the Net Amount: Account for netting, collateral and settlement terms. ✅ Validate the Result: Check market rates, curve assumptions and sensitivity to interest rate changes. Key formula: Swap Value = PV (Receive Leg) − PV (Pay Leg) 💡 Remember: A swap’s value depends on market rates, the discount curve and whether you receive or pay each leg. Want to learn more, Get this Master Financial Swaps in Minutes lnkd.in/d6tgSWyB

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Mergers & Acquisitions involve much more than just buying another company. A proper M&A analysis looks at the full picture: • Target valuation and Enterprise Value • Offer price and acquisition premium • Sources and uses of funds • Debt, leverage and financing capacity • EPS accretion or dilution • Cost and revenue synergies • IRR, NPV and expected returns One of the biggest questions in any deal is simple: Will this acquisition create more value than it costs? A deal can look attractive based on headline numbers, but the real value depends on the price paid, financing structure, synergies and returns generated after the acquisition. 📌 A useful cheat sheet for anyone learning M&A, valuation and financial modelling. Want to learn more, Get this M&A Guide for Free Here lnkd.in/d_nn7fwb

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IFRS vs US GAAP — quick cheat sheet: IFRS: More principle-based Flexible interpretation Used globally US GAAP: More rule-based Detailed accounting guidance Primarily used in the US Key differences: Revenue Recognition: IFRS → Control-based principles GAAP → More industry-specific rules Inventory: IFRS → No LIFO allowed GAAP → LIFO permitted Development Costs: IFRS → Can capitalize under conditions GAAP → Mostly expensed immediately Leases: Both recognize leases on balance sheet, but GAAP has more exceptions. Impairment: IFRS → One-step approach GAAP → Two-step approach In one line: IFRS focuses more on principles. US GAAP focuses more on detailed rules. Want to learn more? Grab this IFRS Vs US GAAP PDF here: lnkd.in/ewEHJM2M

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📊 Futures Trading Explained: Key Concepts to Know Futures trading is more than predicting whether prices will rise or fall. Understanding margin and risk management is essential. Here are the key concepts: 📈 Long vs Short: A long position benefits from rising prices; a short position benefits from falling prices. 📦 Contract Specifications: Lot size, contract size, expiry date and price tick define the contract. 💰 Initial Margin: Funds required to open a futures position. 🔄 Mark-to-Market (MTM): Daily settlement of gains and losses. ⚠️ Maintenance Margin: Minimum balance required to keep a position open. 📞 Margin Call: A demand to add funds when your margin falls below the required level. 💵 Variation Margin: Funds paid or received to cover changes in a futures position’s value. 📅 Rollover: Closing an expiring contract and opening a later-dated one. 📊 Open Interest: Number of outstanding contracts that have not been closed or settled. Key takeaway: Leverage can amplify both profits and losses. Always understand margin requirements, contract expiry and your downside risk before trading. Learn more about Professional Option Trading - lnkd.in/d-95A-a6

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