Terminal value. May 20, 2025 · Terminal value (TV) is the estimated value of a business or an asset beyond the farthest date that can be used in a future cash flow estimate. It is calculated as the present value of all future cash flows. Introduction to Terminal Value Now, let's explore terminal value from different perspectives: 1. Guide to Terminal Value Formula. Terminal Value (TV) is the estimated present value of a business beyond the explicit forecast period. Terminal Value is the estimated value of a business beyond a forecast period. Then, multiply this number by a fraction which represents the growth rate and discount rate. The result is the terminal value. Think of it like valuing a house - you might estimate the rental income for the next few years in detail, but then make a broader assumption about its long-term value. It is a critical part of the financial model, as it typically makes up a large percentage of the total value of a business. dveb sa8wutq od vdtbj 9l drr vkooiy s4s6 njxy sg