How Vinley values listed companies
Vinley values public equities in two complementary ways:

1. Relative valuation compares the share price with the company's earnings, cash flow, assets and enterprise value.

2. Absolute valuation estimates an intrinsic value per share from the cash the business is expected to generate, and compares it with the last price.

This page describes the methods and default assumptions behind every valuation shown in Vinley. All of these methods are publicly known and widely researched valuation techniques, not proprietary formulas. Vinley's approach is mostly influenced by value investing, the discipline built on Benjamin Graham's principles and regularly described by Warren Buffett, Joel Greenblatt and Peter Lynch.

Every valuation in Vinley is an estimate, not a fact. It depends on financial data and on assumptions about the future that may prove wrong. Reported figures (prices, financial statements, ratios) are facts taken from the sources listed below. Intrinsic values, scenarios and margins are opinions derived from those facts using the methods on this page.

Relative valuation
Relative valuation asks whether the share price looks cheap or expensive against the company's own fundamentals. Vinley shows six ratios, all calculated with the last price shown on the screen ("price used for ratios", with its date) and the latest reported financial statements.

1. Price to Earnings (P/E): market capitalisation ÷ net income (equivalent to price ÷ earnings per share). It shows how many years of current profit the market is paying for. Lower usually means cheaper.

2. Price to Free Cash Flow (P/FCF): market capitalisation ÷ free cash flow. It shows the price paid for the cash the business actually generates after investment. Lower usually means cheaper.

3. ​Price to Book (P/B): market capitalisation ÷ book value of shareholders' equity. It shows the price paid for the net assets on the balance sheet. A value near 1 means the market values the company close to its accounting net worth.

4. EV/EBIT: enterprise value ÷ operating profit (EBIT), where enterprise value = market capitalisation + debt − cash. It prices the whole business, including its debt, against its operating profit, so companies with different levels of debt can be compared.

5. Market Cap to NCAV: market capitalisation ÷ net current asset value, where NCAV = current assets − total liabilities. This is Benjamin Graham's "net-net" test. A value below 1 means the company trades below its liquid assets net of all liabilities. A negative value means NCAV is negative, so the test does not apply.

6. Tobin's Q: market value of the company ÷ value of its assets. It shows whether the market values the company above or below what it would cost to rebuild its assets. Below 1 can signal undervaluation.

 
Absolute valuation (intrinsic value)
Absolute valuation estimates what one share is worth today, based on the cash the business is expected to produce. Vinley calculates three intrinsic values (IV) and shows each one with its margin against the last price:

1. IV Discounted Cash Flow (DCF) projects the company's free cash flow forward and discounts each year back to today at the cost of capital.

2. IV Discounted Future Earnings (DFE) applies the same approach to net income instead of free cash flow.

3. IV Dividend Discount Model (DDM) applies the same approach to the dividends paid to shareholders. It suits companies with a stable payout and undervalues companies that reinvest or buy back shares instead. There is no growth rate used in the DDM valuation

For each model, the value per share is the sum of the discounted yearly amounts, divided by the number of shares outstanding:







where X₀ is the latest annual free cash flow (DCF), net income (DFE) or dividends (DDM), g is the growth rate (0% for dividend discount model considering stable dividends), r is the cost of capital and N is the number of years projected. No terminal value is added after year N.

Vinley also calculates :

• the average Intrinsic Value which is the simple average of IV DCF and IV DFE. The DDM is shown separately and is not included in the average.

• the Margin of safety vs last price. This measure shows how far each value is from the last traded price: (IV ÷ last price) − 1. A positive margin means the estimate is above the price (potentially undervalued). A negative margin means it is below (potentially overvalued). The vertical gauge places the average intrinsic value and the last price on the same scale.

Vinley also provides a divergence warning. When the DCF and DFE values differ by more than 70%, Vinley displays a warning. A large gap usually means free cash flow and net income are telling different stories (for example, one-off items, heavy investment or working capital swings) and the financials deserve a closer look before relying on either value.
 
Key assumptions and sensitivity analysis
Intrinsic value depends on three assumptions: the cost of capital, the growth rate and the projection period. Vinley sets a documented default for each and lets users change them, so they can see how sensitive the result is.
 

1. Cost of capital (r): by default, the industry cost of capital plus a company risk spread. Users can adjust the cost of capital component but not the risk spread. Vinley uses the cost of capital of the company's industry as a proxy for its weighted average cost of capital (WACC). It then adds a company risk spread based on the Interest Coverage Ratio (ICR = EBIT ÷ interest expense). The ICR is mapped to a credit rating, and each rating carries a spread: a company that covers its interest many times over gets a low spread, a weakly covered one a higher spread.
   Example: a Luxury Goods company with an industry cost of capital of 8.22% and an ICR of 15.8x (rated AAA, spread 0.40%) is valued at a cost of capital of 8.62%.

2. Growth driver (g): by default, free cash flow growth over the last 3 years. Users can switch to net income or revenue growth, choose a lookback of 1, 3, 5 or 10 years, or set the rate directly (0% to 30%). By default, Vinley uses the historical year-on-year growth of free cash flow over the last 3 years. The user can switch the driver to net income or revenue growth, choose a lookback of 1, 3, 5 or 10 years, or set the rate directly. The chosen growth driver applies to both the DCF and DFE models.

3. Projection period (N): 30 years by default. Users can change the number of years projected. By default, Vinley projects 30 years of cash flows and adds no terminal value. Many conventional DCF models add a terminal value that assumes the business lasts forever, and that single figure often accounts for most of the result. Leaving it out means Vinley only counts cash the business is expected to generate within a defined horizon. This makes Vinley's intrinsic values deliberately conservative, and less sensitive to small changes in long-term assumptions.

4. Terminal value: none. No value is added beyond the projection period to make the valuation even more conservative and based on real academic measures that show that companies do not have an infinite longetivy. Professor Foster of NYU showed that the corporate longevity of companies listed on the S&P 500 has dropped from 67 years in 1920 to 25 years in the 2020 decade. We prefer to take a conservative measure and not to add unrealistic terminal values.
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   Data, dates and limitations
   Sources. Prices, financial statements and company data come from our financial databrokers (FinancialModelingPrep, Canada for stocks) and filings, e.g. annual and interim reports. Industry cost of capital comes from Prof. Aswath Damodaran public datasets, NYU Stern School of Business.
   
   Dates. Every valuation shows the date of the price it uses (for example "Last Price 433.60 EUR (2026-11-11)"). Financial data reflect the latest reports available on that date. 
   
   Limitations. Valuation models simplify reality. Results can change materially with the assumptions chosen, depend on the accuracy & reliability of reported financials, and may not suit every company (for example banks, insurers, early-stage or loss-making companies). Past growth does not guarantee future growth.