From ccfbce79a66b2d8aa136fddbed7c61c7436f2733 Mon Sep 17 00:00:00 2001
From: Tyler <tyler@tylerhoang.xyz>
Date: Thu, 2 Apr 2026 18:54:01 -0700
Subject: Improve DCF model accuracy

---
 services/valuation_service.py | 15 ++++++++++++---
 1 file changed, 12 insertions(+), 3 deletions(-)

(limited to 'services/valuation_service.py')

diff --git a/services/valuation_service.py b/services/valuation_service.py
index 357c679..1230aa5 100644
--- a/services/valuation_service.py
+++ b/services/valuation_service.py
@@ -50,6 +50,7 @@ def run_dcf(
     terminal_growth: float = 0.03,
     projection_years: int = 5,
     growth_rate_override: float | None = None,
+    base_fcf_override: float | None = None,
     total_debt: float = 0.0,
     cash_and_equivalents: float = 0.0,
     preferred_equity: float = 0.0,
@@ -78,7 +79,7 @@ def run_dcf(
         historical_growth = compute_historical_growth_rate(fcf_series)
         growth_rate = historical_growth if historical_growth is not None else 0.05
 
-    base_fcf = float(historical[-1])
+    base_fcf = float(base_fcf_override) if base_fcf_override is not None else float(historical[-1])
     if base_fcf <= 0:
         return {
             "error": (
@@ -136,6 +137,8 @@ def run_ev_ebitda(
     ebitda: float,
     total_debt: float,
     total_cash: float,
+    preferred_equity: float,
+    minority_interest: float,
     shares_outstanding: float,
     target_multiple: float,
 ) -> dict:
@@ -149,11 +152,13 @@ def run_ev_ebitda(
 
     implied_ev = ebitda * target_multiple
     net_debt = (total_debt or 0.0) - (total_cash or 0.0)
-    equity_value = implied_ev - net_debt
+    other_claims = (preferred_equity or 0.0) + (minority_interest or 0.0)
+    equity_value = implied_ev - net_debt - other_claims
 
     return {
         "implied_ev": implied_ev,
         "net_debt": net_debt,
+        "other_claims": other_claims,
         "equity_value": equity_value,
         "implied_price_per_share": equity_value / shares_outstanding,
         "target_multiple_used": target_multiple,
@@ -164,6 +169,8 @@ def run_ev_revenue(
     revenue: float,
     total_debt: float,
     total_cash: float,
+    preferred_equity: float,
+    minority_interest: float,
     shares_outstanding: float,
     target_multiple: float,
 ) -> dict:
@@ -177,11 +184,13 @@ def run_ev_revenue(
 
     implied_ev = revenue * target_multiple
     net_debt = (total_debt or 0.0) - (total_cash or 0.0)
-    equity_value = implied_ev - net_debt
+    other_claims = (preferred_equity or 0.0) + (minority_interest or 0.0)
+    equity_value = implied_ev - net_debt - other_claims
 
     return {
         "implied_ev": implied_ev,
         "net_debt": net_debt,
+        "other_claims": other_claims,
         "equity_value": equity_value,
         "implied_price_per_share": equity_value / shares_outstanding,
         "target_multiple_used": target_multiple,
-- 
cgit v1.3-2-g0d8e