Overview
This intrinsic value excel template is a useful tool for investment professionals. The intrinsic value of a company or an investment is the present value of all future cash flows, discounted at a discount rate (normally the weighted average cost of capital or WACC). Another way to interpret the intrinsic value is the price a rational investor is willing to pay for an investment, given its level of risk. This intrinsic value excel template uses intrinsic valuation which looks at the inherent value of the company, as opposed to relative valuation techniques such as comparable company analysis or precedent transactions which compare similar companies in an industry. The formula for calculating the intrinsic value of a company is similar to the net present value formula: Intrinsic Value = FV0/(1+i)^0 + FV1/(1+i)^1 + FV2/(1+i)^2 + ... + FVn/(1+i)^n Where: FVn = Net cash flow for the nth period i = Discount rate (WACC) n = Number of periods
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