Generalized Free Cash Flow to the Firm (FCFF) Model for Negative Earnings Firms

This model is designed to value a firm, with changing margins, revenue growth, and other parameters.

by Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,011

with NYU Stern School of Business
An Education in PossibleFollow 50

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Description
The user has to define the following inputs:
- Length of high growth period
- Expected growth rate in earnings during the high growth period.
- Capital Spending, Depreciation and Working Capital needs during the high growth period.
- Expected growth rate in earnings during the stable growth period.
- Inputs for the cost of capital. (Cost of equity, Cost of debt, Weights on debt and equity)

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)

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