Frontiers · Global Equities · Model methodology
A transparent scenario model, not a forecast.
Global Equities model methodology
Inspect projection, cash-flow, DCF and return conventions and the deliberate exclusions.
Company and price projection
Issuer amounts in CU; revenue and shares in millions.
| Measure | Formula / timing |
|---|---|
| Revenue | Current revenue × (1 + annual growth)^year. |
| Net margin | Linear progression from current margin to the selected final margin across the hold. |
| Diluted shares | Current million shares × (1 + annual net share-count change)^year. |
| EPS | Revenue × net margin ÷ diluted shares. |
| P/E path | Linear from entry price ÷ positive current EPS to terminal P/E. If current EPS is non-positive, terminal P/E is used throughout and a warning appears. |
| Share price | Max(0, forecast EPS × forecast P/E). No simulated market volatility. |
| Dividend / share | Max(0, forecast EPS) × payout ratio, paid at year-end. |
| FX | Initial USD per CU × (1 + annual FX change)^year. Positive change strengthens the issuer currency against USD. |
Investor cash flows and fees
Investor amounts in USD, year-end timing.
Initial shares = investor budget ÷ [entry price × initial FX × (1 + purchase fee)]. Fractional shares are allowed. Annual dividends are based on opening investor shares. Withholding applies after any wrapper pass-through. Reinvestment uses the year-end scenario price and purchase fee; if that price is zero, dividends are paid in cash.
Annual account fees = opening shares × year-end USD price × custody rate, plus the wrapper rate where selected. Fees are externally funded or netted against distributed dividends; no shares are sold to pay them, so additional investor contributions can occur. Reinvestment occurs after this fee basis is measured.
Sale proceeds = final shares × final USD price, less any wrapper terminal discount, then the sale fee. Withholding is illustrative; other income, capital-gains and transaction taxes are excluded.
NPV discounts annual investor flows at the annual hurdle. IRR is annualised; annual flows sit at 12-month intervals in the shared monthly solver. Multiple detected roots suppress a single IRR. The net-flow multiple = positive net flows ÷ absolute negative net flows; same-year flows are netted, so it can understate within-year funding.
DCF is a separate valuation
It does not drive the shareholder price path.
FCFE per share = EPS × cash-conversion ratio, discounted at the cost of equity. Terminal value = final FCFE/share × (1 + terminal growth) ÷ (cost of equity − terminal growth), discounted to today and added to explicit values. Cost of equity must exceed terminal growth. Displayed value is floored at zero; the raw result stays visible.
FCFE is cash available to equity after company financing needs — do not subtract net debt again. Dividends are not added. Terminal growth is per-share; no further share-count change applies after the horizon. Implied growth is found by bisection between −50% and 100% on investor NPV.
Scope, independence and storage
What the model deliberately leaves out.
Profiles are fictional. There is no live quote feed, portfolio optimiser, balance-sheet forecast, margin loan, options model, correlation estimate or probability forecast. Growth, margins, share-count change and payout are independent inputs; the model does not show they are jointly fundable. Stock splits are not dilution; buyback funding is not modelled.
Inputs and evidence notes are kept in this browser tab. The JSON export includes assumptions, schedules and the evidence register; CSV provides annual shareholder cash flows. Research is a dated snapshot with linked sources.