Our Company Valuation models are very sophisticated discounted cash flow and earnings quality models.

An enormous amount of works goes into every model. I wish I could offer a short-cut (beyond our ratings and reports) for understanding our models.

These models have more depth than most models in the market. We attempt to present the model in layers per below.

How to navigate after opening a model (done from the Ratings page:


  1. Decision page: view our expectations analysis of the current stock price, i.e. the future cash flow lifecycle (growth, profitability and duration of growth) required to justify the stock price
  2. Forecast Page: view the default forecast and create and save your own forecasts that you can, in turn, view on the Decision page
    • Picture of Forecast page for BAC
    • To create your own forecast scenario (Neutral, Optimistic or Pessimistic)
      • Click “Edit” on the Forecasts Page
      • Enter your own estimates/forecasts for
        • Revenue Growth
        • Pre-tax profit margins (NOPBT)
        • Cash Tax Rates
        • Incremental net working capital
        • Incremental fixed assets
      • Click “Save” when finished editing forecasts
      • Picture of Forecast page for BAC while editing forecasts
  3. Overrides: review and change all the adjustments made throughout the model
  4. DCF Review: see the DCF model(s) behind every scenario (neutral, optimistic, etc)
  5. WACC Review: see all assumptions behind our weighted-average cost of capital calculation


  1. Review a few simple charts. Our focus is on gathering and modeling the best data. We direct clients to copy and paste data from our models to build their own charts rather than try to anticipate every possible charting need.


  1. Balance Sheet: as reported value taken from the 10-K
  2. Income Statement: as reported value taken from the 10-K for income statement and cash flow statements
  3. Adjustments: review how we convert Net Income into NOPAT and convert Reported Net Assets into Invested Capital. NOPAT divided by Average Invested Capital = ROIC.
  4. ESO: details on data we collect on company’s stock option plans
  5. NOPAT: details behind our NOPAT calculation along with several other useful metrics
  6. Invested Capital: details behind out Invested Capital calculation from the operating and financing perspectives
  7. PV leases: details on the operating leases of companies


  1. Access all of the 10-ks that from which we parsed all data in our model
  2. Use the drop down menu to jump to all the places from which we parsed data. You will find some very interesting details here for many companies.


Key References:

Company Models Helphttp://www.newconstructs.com/nc/help/maxVal.htm

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