top of page

Flow to Equity

The Flow-to-Equity equity approaches method is a company valuation methodology which is based on estimating the value of the company's equity using the free cash flows (FCF) generated by the company itself. Specifically, this method calculates the present value of the firm's expected future cash flows, discounted at an appropriate discount rate, and adds the present value to the firm's terminal value. It can be useful, combined with other methodologies, when the company has a complex or ill-defined financial structure, or when the company has a history of predictable and stable free cash flows (FCF).

bottom of page