feat: add DCF verification script

1 files changed, 129 insertions, 0 deletions

diff --git a/frontend/scripts/verify-dcf.ts b/frontend/scripts/verify-dcf.ts
new file mode 100644
index 0000000..2787eb1
--- /dev/null
+++ b/frontend/scripts/verify-dcf.ts
@@ -0,0 +1,129 @@
+import { computeDcf, DcfInputs, DcfParams } from "../lib/dcf";
+
+interface Scenario {
+  name: string;
+  inputs: DcfInputs;
+  params: DcfParams;
+  expected: {
+    intrinsicValuePerShare: number;
+    enterpriseValue: number;
+    equityValue: number;
+    fcfPvSum: number;
+    terminalValuePv: number;
+  };
+}
+
+// Independent reference implementation of the DCF math used by both backend
+// (data_service._run_dcf) and frontend (lib/dcf.ts:computeDcf).
+function expectedDcf(
+  baseFcf: number,
+  growthRate: number,
+  wacc: number,
+  terminalGrowth: number,
+  projectionYears: number,
+  equityBridge: number,
+  sharesOutstanding: number
+) {
+  const projected: number[] = [];
+  for (let i = 1; i <= projectionYears; i++) {
+    projected.push(baseFcf * (1 + growthRate) ** i);
+  }
+
+  const fcfPvSum = projected.reduce(
+    (sum, fcf, i) => sum + fcf / (1 + wacc) ** (i + 0.5),
+    0
+  );
+
+  const terminalFcf = projected[projected.length - 1] * (1 + terminalGrowth);
+  const terminalValue = terminalFcf / (wacc - terminalGrowth);
+  const terminalValuePv = terminalValue / (1 + wacc) ** (projectionYears - 0.5);
+
+  const enterpriseValue = fcfPvSum + terminalValuePv;
+  const equityValue = enterpriseValue - equityBridge;
+  const intrinsicValuePerShare = equityValue / sharesOutstanding;
+
+  return {
+    intrinsicValuePerShare,
+    enterpriseValue,
+    equityValue,
+    fcfPvSum,
+    terminalValuePv,
+  };
+}
+
+function makeScenario(
+  name: string,
+  baseFcf: number,
+  growthRate: number,
+  wacc: number,
+  terminalGrowth: number,
+  projectionYears: number,
+  sharesOutstanding: number,
+  netDebt: number,
+  preferredEquity = 0,
+  minorityInterest = 0
+): Scenario {
+  const equityBridge = netDebt + preferredEquity + minorityInterest;
+  return {
+    name,
+    inputs: { baseFcf, equityBridge, sharesOutstanding },
+    params: { wacc, terminalGrowth, projectionYears, growthRate },
+    expected: expectedDcf(
+      baseFcf,
+      growthRate,
+      wacc,
+      terminalGrowth,
+      projectionYears,
+      equityBridge,
+      sharesOutstanding
+    ),
+  };
+}
+
+const scenarios: Scenario[] = [
+  makeScenario("1-year with equity bridge", 105, 0.05, 0.1, 0.03, 1, 10, 15, 2, 3),
+  makeScenario("3-year no claims", 105, 0.05, 0.1, 0.03, 3, 10, 0),
+  makeScenario("5-year default horizon", 105, 0.05, 0.1, 0.03, 5, 10, 0),
+  makeScenario("zero growth flat FCF", 100, 0.0, 0.1, 0.02, 5, 10, 0),
+];
+
+function closeEnough(actual: number, expected: number): boolean {
+  const tol = 1e-9 + 1e-6 * Math.abs(expected);
+  return Math.abs(actual - expected) <= tol;
+}
+
+let failed = 0;
+
+for (const scenario of scenarios) {
+  const computed = computeDcf(scenario.inputs, scenario.params);
+  if ("error" in computed) {
+    console.error(`FAIL ${scenario.name}: returned error "${computed.error}"`);
+    failed++;
+    continue;
+  }
+
+  const keys = Object.keys(scenario.expected) as Array<keyof typeof scenario.expected>;
+  const mismatches = keys.filter(
+    (key) => !closeEnough(computed[key], scenario.expected[key])
+  );
+
+  if (mismatches.length === 0) {
+    console.log(`PASS ${scenario.name}`);
+  } else {
+    console.error(`FAIL ${scenario.name}`);
+    for (const key of mismatches) {
+      console.error(
+        `  ${key}: got ${computed[key]}, expected ${scenario.expected[key]}`
+      );
+    }
+    failed++;
+  }
+}
+
+if (failed === 0) {
+  console.log("\nAll frontend DCF scenarios passed.");
+  process.exit(0);
+} else {
+  console.error(`\n${failed} frontend DCF scenario(s) failed.`);
+  process.exit(1);
+}