Corporate Valuation and Financial Solvency Models for Indian Professionals
Advanced Corporate & Portfolio Valuation Engine
DCF · M&A · MPT · NAV · Relative · DuPont · Z‑Score · WACC · DDM
Discounted Cash Flow (DCF) – Core Valuation Model
Enterprise Value = Σ [ FCFt / (1 + WACC)t ] + [ Terminal Value / (1 + WACC)n ]
Why? DCF estimates intrinsic value by discounting expected future cash flows to present value, reflecting time value of money and risk.
Alternative: Adjusted Present Value (APV), Dividend Discount Model (DDM) for stable payers.
How to use: Enter current free cash flow, expected growth for the next 5 years, WACC (discount rate), and terminal growth rate. The model calculates PV of explicit forecast and terminal value. A sensitivity table is generated automatically.
₹
EPS Accretion / Dilution Analysis
Post‑Deal EPS = (Acquirer NI + Target NI + Synergies – After‑tax Interest) / New Total Shares
Why? Measures immediate EPS impact of an acquisition, incorporating synergies and financing costs.
Alternative: Pro‑forma income statement, full three‑statement merger model.
How to use: Input acquirer and target financials, purchase price, financing mix, and synergies. The tool shows whether the deal is accretive or dilutive.
₹
₹
₹
₹
₹
Modern Portfolio Theory & Gordon Growth Model
σp = √[ Σ wi²σi² + ΣΣ wiwjσiσjρ ]
Why? Quantifies total portfolio risk using individual variances and co‑movements (correlation ρ).
Alternative: Single‑index model (CAPM beta), Black‑Litterman for views.
How to use: Enter up to 3 securities with price, dividend, growth, required return, weight, and volatility. Set the average correlation. The tool calculates portfolio risk, return, diversification benefit, and intrinsic value via Gordon Growth Model.
| Security | Price (₹) | Next Div | Growth% | Req.Ret% |
|---|---|---|---|---|
| Weight% Volatility% | ||||
| Weight% Volatility% | ||||
| Weight% Volatility% | ||||
Relative Valuation (Market Multiple)
Implied Share Price = Target EPS × Peer P/E Multiple
Why? Quick market‑based benchmarking using the most common multiple.
Alternative: EV/EBITDA, P/B, PEG ratio for growth adjustments.
How to use: Input the company’s EPS and the peer group average P/E ratio to obtain the implied fair price.
₹
DuPont ROE Decomposition
5‑Step ROE = Tax Burden × Interest Burden × Operating Margin × Asset Turnover × Equity Multiplier
Why? Breaks ROE into operational and financial drivers to identify true performance sources.
Alternative: 3‑step DuPont, extended DuPont with additional leverage layers.
How to use: Input Net Income, EBT, EBIT, Revenue, Avg Assets, and Avg Equity. The tool shows both 3‑step and 5‑step DuPont with diagnostic feedback.
₹
₹
₹
₹
₹
₹
Altman Z‑Score (Bankruptcy Prediction)
Z = 1.2X₁ + 1.4X₂ + 3.3X₃ + 0.6X₄ + 1.0X₅
Why? Combines liquidity, profitability, leverage, and efficiency into a single solvency score.
Alternative: Z'‑Score for private firms, Ohlson O‑Score for modern models.
How to use: Input working capital, retained earnings, EBIT, market value of equity, sales, total assets, and total liabilities. The model computes the Z‑score and classifies risk.
₹
₹
₹
₹
₹
₹
₹
Weighted Average Cost of Capital (WACC)
WACC = (E/V) × Re + (D/V) × Rd × (1 – Tax Rate)
Why? WACC represents the blended cost of capital from equity and debt, used as the discount rate in DCF.
Alternative: Arbitrage Pricing Theory (APT), Build‑up method for private firms.
How to use: Enter cost of equity, cost of debt, tax rate, and the market values of equity and debt. The tool computes WACC and shows the weightings.
₹
₹
Dividend Discount Model (Gordon Growth)
Value = D₁ / (r – g)
Why? Values a stock based on the present value of infinite growing dividends. Best for stable, dividend‑paying companies.
Alternative: Multi‑stage DDM for variable growth, H‑model for declining growth.
How to use: Enter the expected next dividend, required rate of return, and perpetual growth rate. The model computes the intrinsic value per share.
₹
Professional Valuation Tools · cmaknowledge.in
Professional Regulatory Disclaimer:
This technical analysis and the embedded interactive engines are designed strictly for educational, academic, and professional training reference. Real-world corporate valuation under Indian laws—including Section 56(2)(viib) of the Income Tax Act, Foreign Exchange Management Act (FEMA) regulations, and IBBI rules—requires strict adherence to statutory guidelines and must be executed by an IBBI Registered Valuer or SEBI Registered Category-I Merchant Banker.
This technical analysis and the embedded interactive engines are designed strictly for educational, academic, and professional training reference. Real-world corporate valuation under Indian laws—including Section 56(2)(viib) of the Income Tax Act, Foreign Exchange Management Act (FEMA) regulations, and IBBI rules—requires strict adherence to statutory guidelines and must be executed by an IBBI Registered Valuer or SEBI Registered Category-I Merchant Banker.
CMA Knowledge.in
Empowering CMA students with free MCQ tests, study resources, and professional insights.
Visit us at www.cmaknowledge.in
Follow us on Facebook: @cmaknowledge
