Finance · Investments & Markets

Residual Income Valuation Calculator

Add current book value to discounted forecast residual income and an entered terminal residual-income value.

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Quick guide

How to use this calculator

  1. Enter the cash flows, values, rates, timing, or portfolio assumptions named in the fields.
  2. Use one consistent period and currency convention throughout the scenario.
  3. Read the calculator-specific model limits before interpreting the result.

Calculation method

Calculation method

Equity value = book value + Σ[RI_t/(1+r)^t] + terminal value/(1+r)^n.

Model, simulation, root, square-root, and compounding outputs are estimates and are visibly marked approximate.

Worked example

Worked example

Book value 100 plus annual residual-income forecasts and a terminal value are discounted at the entered required return.

Equity value = book value + Σ[RI_t/(1+r)^t] + terminal value/(1+r)^n.

Supported inputs

Precision and limits

Visible input limits

Inputs support up to 12 decimal places and lists support at most 1,200 rows. Iteration and simulation bounds are displayed in their fields.

International scope

No exchange, tax system, reporting standard, currency, fund rule, trading calendar, or market convention is selected automatically.

Decision boundary

Outputs are entered scenarios, not valuations, forecasts, risk limits, executable trades, suitability decisions, or recommendations.

Calculator-specific assumptions

Residual-income rows must already reflect earnings minus the required charge on beginning equity; the calculator does not derive that accounting measure.