valuation_time_value
Time Value of Money
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Time value of money: discount or compound a single sum, value level and growing annuities and perpetuities, and compute a terminal value by Gordon growth or exit multiple. Method selects the formula. Use to move cash flows through time or to value a terminal value in a DCF; combine with a rate from valuation_discount_rate. For uneven multi-period cash flows use valuation_income_methods; for rate construction use valuation_discount_rate. Per method: present_value needs future_value + discount_rate + periods; future_value needs present_value + discount_rate + periods; annuity_pv needs payment + discount_rate + periods; perpetuity_pv needs payment + discount_rate; growing_annuity_pv needs payment + discount_rate + growth_rate + periods; terminal_value_gordon_growth needs final_year_cashflow + perpetual_growth_rate + discount_rate; terminal_value_exit_multiple needs final_year_cashflow + exit_multiple. Rates and growth are decimals (0.10 = 10%); for terminal_value_gordon_growth the discount rate must exceed the perpetual growth rate. Only method is required; all other parameters are method-dependent — supply those the selected method names and omit the rest (defaults apply where defined). Rates and premiums are decimals (0.10 = 10%). Pure arithmetic: no I/O and no external calls, rounded to 2 decimals; parameters belonging to other methods are accepted and ignored. An unknown method, or a missing method-required parameter, returns an error instead of a value.
Input schema
| Property | Type | Required | Description |
|---|---|---|---|
| method | string | yes | Formula to apply. Options: present_value = PV = FV / (1 + r)^n.; future_value = FV = PV * (1 + r)^n.; annuity_pv = PV = PMT * [1 - (1 + r)^-n] / r.; perpetuity_pv = PV = PMT / r.; growing_annuity_pv = PV of a constant-growth annuity.; terminal_value_gordon_growth = TV = FCF * (1 + g) / (r - g).; terminal_value_exit_multiple = TV = FCF * exit multiple. |
| future_value | number | no | Future cash amount to discount, in currency units. |
| discount_rate | number | no | Per-period discount rate as a decimal (0.10 = 10%). |
| periods | integer | no | Number of periods n (non-negative). |
| present_value | number | no | Present amount to compound, in currency units. |
| payment | number | no | Recurring payment per period, in currency units. |
| growth_rate | number | no | Per-period growth rate as a decimal (0.03 = 3%). |
| final_year_cashflow | number | no | Final-year projected cash flow (FCF), in currency units. |
| perpetual_growth_rate | number | no | Perpetual growth rate g as a decimal; must be below discount_rate for Gordon growth. |
| exit_multiple | number | no | Exit multiple applied to the final-year cash flow (e.g. 8.0 for 8x). |
Raw JSON schema
{
"type": "object",
"properties": {
"method": {
"type": "string",
"enum": [
"present_value",
"future_value",
"annuity_pv",
"perpetuity_pv",
"growing_annuity_pv",
"terminal_value_gordon_growth",
"terminal_value_exit_multiple"
],
"description": "Formula to apply. Options: present_value = PV = FV / (1 + r)^n.; future_value = FV = PV * (1 + r)^n.; annuity_pv = PV = PMT * [1 - (1 + r)^-n] / r.; perpetuity_pv = PV = PMT / r.; growing_annuity_pv = PV of a constant-growth annuity.; terminal_value_gordon_growth = TV = FCF * (1 + g) / (r - g).; terminal_value_exit_multiple = TV = FCF * exit multiple."
},
"future_value": {
"type": "number",
"description": "Future cash amount to discount, in currency units."
},
"discount_rate": {
"type": "number",
"description": "Per-period discount rate as a decimal (0.10 = 10%)."
},
"periods": {
"type": "integer",
"description": "Number of periods n (non-negative)."
},
"present_value": {
"type": "number",
"description": "Present amount to compound, in currency units."
},
"payment": {
"type": "number",
"description": "Recurring payment per period, in currency units."
},
"growth_rate": {
"type": "number",
"description": "Per-period growth rate as a decimal (0.03 = 3%)."
},
"final_year_cashflow": {
"type": "number",
"description": "Final-year projected cash flow (FCF), in currency units."
},
"perpetual_growth_rate": {
"type": "number",
"description": "Perpetual growth rate g as a decimal; must be below discount_rate for Gordon growth."
},
"exit_multiple": {
"type": "number",
"description": "Exit multiple applied to the final-year cash flow (e.g. 8.0 for 8x)."
}
},
"required": [
"method"
]
}