What is my company worth?
A valuation tool for private, profitable companies, using the capitalized cash flow method to discount future cash flows at a calculated rate.
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The capitalized cash flow method values your company’s equity value as a growing perpetuity following these steps.
Step one:
Subtract an estimated growth rate from a blended cost of equity and cost of debt, otherwise referred to as the weighted average cost of capital (“WACC”).
- The WACC represents the rate of return specific to your company, and reflects the risk of investment in your company. The WACC was calculated using the capital asset pricing model (“CAPM”) for cost of equity, adjusted for the company’s size and company-specific risks; weighting of the company’s debt and equity; and an estimated cost of debt.
- The growth rate subtracted from the WACC represents your company’s expected long-term growth, which is assumed to be the growth rate of Gross Domestic Product (“GDP”) in the United States, around 3.00%.
Step two:
Divide the expected free cash flow by step one.
Step three:
Add the company’s cash balance as of today.
Step four:
Subtract the company’s debt balance as of today.
Interested in utilizing other methodologies for a more robust valuation and detailed report?
This calculator is provided for your informational purposes only by eShares, Inc. dba Carta, Inc. (“Carta”). Carta does not provide legal, tax, or financial advice, and the use of this calculator is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. USE OF THIS CALCULATOR IS ENTIRELY AT YOUR OWN RISK, AND CARTA ASSUMES NO LIABILITY FOR THE USE OF OR RELIANCE ON THIS CALCULATOR. Carta provides no assurances of this calculator’s applicability or accuracy with respect to your particular circumstances. This calculator is provided “as is” without warranty of any kind, either express, implied, or statutory, including without limitation, warranties of merchantability, fitness for a particular purpose, satisfactory purpose, title or noninfringement. Some jurisdictions do not allow the exclusion of implied warranties, so these exclusions may not apply to you.
