AFERCapital
Reverse DCF
01Anchor
What the model is being solved against — the price and the claims that sit ahead of equity.
$
m
$m
$m
Market cap—
Enterprise value—
EV / sales—
02Operating drivers
The economics the business itself controls. Select an archetype to load typical investment rates.
Select an archetype
Nine models, one inventory question

Pick an archetype to load typical investment rates. Both rates are spent per dollar of new sales, not total sales — and fixed capital means capex net of depreciation, since depreciation already sits inside the operating margin.

$m
%
%
% of ΔS
% of ΔS
03Valuation basis
Set by the market and your view of risk, not by the company.
%
%

The discount rate is a claim about risk and the price of money, not about the company — it belongs outside the operating case so a change of view here never gets confused with a change of view about the business. Threshold margin is the operating margin at which growth stops paying for itself at this cost of capital.

04Solve
Hold every driver but one, then back into the value the price is already paying for.
%/yr
yrs
Market-implied sales growth
—
—
Forecast cash flow Residual value
Incr. ROIC—
Threshold margin—
Value of growth—

—

05Marginal value
What one additional unit of each driver is worth, in dollars per share.

Each row is the change in value per share from adding one more unit of that driver, holding everything else at the solved expectation. Sales growth steps by 2pp when the base rate is 10% or above and 1pp below it — the same absolute miss means something very different at 3% growth than at 20%. Forecast period is what buying one additional year of value-creating growth is worth. Green adds value, red destroys it; the longest bar is the assumption your research time should go to. Cost of capital sits apart below because it is a claim about risk and the price of money, not about the business.

06Expectations gap
Your own scenarios, probability-weighted, measured against what the market is paying.
Bear
Base
Bull
Growth %
Margin %
Years
Probability
Value
—
—
—
Price
Expected
Expected value—
Expectations gap—
Prob. weight—
AFER Capital
Est. 2023  \u00b7  Trd

AFERCapital

Nine Business Models
01The principle

Every business is an inventory problem. Identify what the company acquires, what it holds, and what it converts that into — and the archetype falls out, along with the metrics that matter and the place the moat has to sit. The nine models below are exhaustive for operating businesses; the pre-gate covers the cases that sit outside the tree entirely.

02Pre-gate — before the tree
03Decision tree

Run in order and stop at the first clean yes. Then verify against the financial fingerprint inside each model below — where the fingerprint contradicts the narrative, the fingerprint usually wins.

04The nine models
05Hybrids
06Misclassification quick reference
CLASSIFY BY OPERATING INCOME, NOT REVENUE · EVERY LARGE CAP IS A HYBRID · THE FINGERPRINT BEATS THE NARRATIVE
AFER Capital
Est. 2023  ·  Trd