A firm value calculator (FVC) is introduced that is much faster and less tedious than its pro forma counter-part. The additional benefit of this FVC over what is available in the existing literature is a direct analysis of the effect of leverage. The debt analysis is captured within both the firm's cash flow and the discount rate for the firm's cash flow. The calculator can be implemented on a hand-held calculator or on an Excel spreadsheet making the analysis very amenable to the classroom.

Document Type


Publication Date

Winter 2003

Publisher Statement

Copyright © 2003 Financial Education Association. This article first appeared in the Journal of Financial Education 29 (Winter 2003): 65-82.

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