Elevent Index Advisory / FAQ
Company valuation questions, answered
Published by Elevent Index Advisory. Last updated .
Plain-language answers about how the Elevent Index Advisory valuation calculator works, from FCFF and CAPM to currency and scale.
What does this company valuation calculator calculate?
The Elevent Index Advisory company valuation calculator estimates operating enterprise value from discounted free cash flow to the firm (FCFF). It adds non-operating cash and assets, subtracts debt and other claims, and divides equity value by fully diluted shares to estimate value per share. The result is an educational estimate based on your inputs, not a quoted market price.
Who publishes this valuation workspace?
This valuation workspace is published by Elevent Index Advisory and is part of the advisory division of Elevent Index. The calculator and Dr. Ghosh provide valuation education; this affiliation alone does not establish regulatory registration or certification.
How is free cash flow to the firm calculated?
FCFF equals after-tax operating profit plus depreciation and amortisation, minus capital expenditure and the increase in noncash operating working capital. EBIT equals EBITDA minus depreciation and amortisation. The calculator charges operating tax only when EBIT is positive; it does not assume an immediate tax credit for losses.
What is the difference between drivers mode and simple FCFF mode?
Drivers mode forecasts revenue, EBIT margin, depreciation, capital expenditure and working-capital investment separately. Revenue growth fades toward terminal growth and the EBIT margin moves toward your target. Simple FCFF mode grows the base-year FCFF at a constant rate; it does not independently model sales, margins or a loss-making turnaround.
How does CAPM calculate the discount rate?
Cost of equity equals the risk-free rate plus beta multiplied by the equity risk premium. WACC blends this equity cost with the after-tax cost of debt using your target debt share of total capital. Rates must match the cash-flow currency. Enter 12 for 12%, and enter beta as a multiplier such as 1.2, not 120%.
Why must WACC exceed terminal growth?
The continuing-value formula divides next-year terminal FCFF by WACC minus terminal growth. If WACC is equal to or below terminal growth, this perpetuity formula is not valid and the calculator rejects the inputs. A small positive difference can still make the valuation extremely sensitive to assumptions.
How does terminal growth affect reinvestment?
In drivers mode, the terminal reinvestment rate equals terminal growth divided by the return on new invested capital. Normalised terminal FCFF equals terminal NOPAT multiplied by one minus this reinvestment rate. Return on new capital must be positive and at least terminal growth. Simple FCFF mode instead uses a growing cash-flow perpetuity without explicitly forecasting reinvestment.
Can I value an Indian company in INR, lakhs or crores?
Yes. The calculator defaults to India, Indian rupees and crores, and also supports lakhs and other amount scales. Changing scale preserves the underlying monetary amounts. Fully diluted shares are always a full-unit count: enter 1000000 for ten lakh shares, even when money is displayed in crores.
Does changing currency convert the financial figures?
No. Currency selection changes the display label and does not perform foreign-exchange conversion. Every monetary input must already be in the same selected currency. Country selection supplies editable currency and scale defaults; it does not fetch accounts or set company-specific tax and risk assumptions.
Are the country equity-risk premiums live market data?
No. The optional country-risk picker contains a research snapshot dated 5 January 2026 covering 178 markets. Applying a selected total equity-risk premium changes that input and selects CAPM, leaving the other assumptions unchanged. Total equity risk premium already includes country risk; do not add it twice. Review the company’s operating exposure and the date before using it.
Do peer multiples replace the DCF valuation?
No. Peer EV/EBITDA, EV/EBIT, EV/revenue and P/E are separate market comparisons and are not averaged into the intrinsic DCF value. Earnings-based comparisons require positive denominators. The optional exit EV/EBITDA check requires an EBITDA forecast in drivers mode and is discounted from the final forecast year-end.
Can I export my valuation and use Dr. Ghosh?
After calculating, you can export the detailed CSV worksheet or print an A4 landscape report and save it as a PDF. Dr. Ghosh explains the supplied assumptions and calculation without changing your calculator inputs. The calculator and tutor support learning, not personal investment advice.