#Frequently Asked Questions (FAQ)

If you have additional questions that are not covered here, please feel free to reach out to us via our Support Page or by joining our Discord community.

#Table of Contents

#Valuation Models Questions

#Which valuation model should I choose?

If you are uncertain about which model to choose, check out the diagram below.

#How are revenues projected in the valuation models?

The initial growth rate and the corresponding projected revenue are determined through linear regression based on past performance. For a visual representation, check out the chart for AAPL where the blue line represents Apple's revenue, and the purple line is the linear regression fitted to historical revenues. From the second projection year onward, a stable revenue growth rate is applied.

#Which model can I use to value stocks that are currently unprofitable, experiencing significant losses?

While we may not have extensive documentation on this subject, we recommend reviewing the insights shared by Professor Aswath Damodaran in this informative paper: Valuing Young, Start-up and Growth Companies: Estimation Issues and Valuation Challenges.

#How do we define financial service firms?

Financial service firms are characterized by challenges in defining debt and capital expenditures, making it challenging to estimate Free Cash Flow (FCF). Additionally, their assets are marked to market. Read more in our documentation on GitHub based on professor Aswath Damodaran's paper Valuing Financial Service Firms.

#API Questions

#Where is the data sourced from?

Most of our data is supplied by "financialmodellingprep.com" and please keep in mind that the data might not always be 100% accurate.

#Where should I report missing or incorrect data?

You can report missing or incorrect data either by email support@discountingcashflows.com or by joining our Discord community.

#How are "calculated" fields actually calculated?

You may have noticed some properties starting with 'calculated', such as 'calculatedEbitda'. These fields are derived from other existing fields, and the formula used for each is provided below.

Income Statement

• calculatedOtherExpenses = grossProfit - researchAndDevelopmentExpenses - sellingGeneralAndAdministrativeExpenses - operatingIncome

• calculatedOperatingExpenses = grossProfit - operatingIncome

• calculatedNetInterest = interestIncome - interestExpense

• calculatedOtherIncome = incomeBeforeTax - operatingIncome - calculatedNetInterest

• calculatedIncomeNonControlling = incomeBeforeTax - incomeTaxExpense - netIncome

• calculatedEbitda = operatingIncome + depreciationAndAmortization

Balance Sheet Statement

• calculatedOtherCurrentAssets = totalCurrentAssets - cashAndShortTermInvestments - netReceivables - inventory

• calculatedOtherNonCurrentAssets = totalNonCurrentAssets - propertyPlantEquipmentNet - goodwillAndIntangibleAssets - longTermInvestments

• calculatedOtherCurrentLiabilities = totalCurrentLiabilities - accountPayables - shortTermDebt - taxPayables - deferredRevenue

• calculatedOtherNonCurrentLiabilities = totalNonCurrentLiabilities - longTermDebt - deferredTaxLiabilitiesNonCurrent

Cash Flow Statement

• calculatedOtherWorkingCapital = changeInWorkingCapital - accountsReceivables - inventory - accountsPayables - otherWorkingCapital