Adjusted Present Value (APV) is a technique combining the all-equity net present value of an investment with additional value adjustments relating to specific financing elements like tax concessions.
The discount factor, also known as the present-value factor, is a figure used to determine the present value of future cash flows by considering the time value of money and a specific hurdle rate.
The Dividend Growth Model (DGM) is a fundamental method used to estimate the cost of equity by using dividends currently paid along with their projected growth rate.
Expected Value (EV) is a fundamental concept in probability and statistics used in decision making, which represents the average outcome when accounting for all possible scenarios, weighted by their respective probabilities.
A technique used for predicting cost behavior by analyzing the highest and lowest activity levels in a dataset to create a cost function. Though simple, it lacks mathematical rigor and precision.
A financial projection model that predicts sharply increasing earnings following a period of modest growth, visually resembling a hockey stick when plotted on a graph.
A 'Number Cruncher' refers to both a person who spends much time calculating and analyzing numerical data as well as a computer specifically designed to perform extensive numerical calculations.
Sensitivity Analysis is a financial modeling tool used to predict the outcome of a decision given a certain range of variables.
A financial modeling technique that considers the likely outcomes of different hypothetical circumstances. Uncertainty may be modeled by the use of random numbers, as in a *Monte Carlo simulation* or worst cases by the use of *stress testing*.
A computer application used for tabular calculations and complex financial modeling, capable of housing text, numbers, and formulas within a structured matrix of cells in rows and columns.
A stochastic process or variable relies on probabilistic behavior and chance, commonly used in fields like statistics, finance, and engineering to model systems that are inherently random.
Identifying and managing value drivers is crucial for forecasting future cash flows and ensuring the long-term viability of a business.
