§ Valuation models
Valuation model
Glossary version 2026-07-12.v1 · reviewed July 12, 2026
A structured calculation that estimates business or equity value from financial inputs and explicit assumptions. Different models suit different business types and should be reconciled rather than treated as interchangeable answers.
A valuation model converts assumptions about earnings, cash flow, growth, risk, and capital structure into an estimate of value. DCF, discounted earnings, residual income, dividend discount, and peer-multiple methods answer related but different questions. Reports use the models appropriate to the company archetype, disclose each model’s role, and combine only the outputs that are suitable for the final Fair value calculation.