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Investment Tools

Introduction

 

The right tools can make investing both easier and more consistent. I've created these calculators to simplify some of the valuation methods I use when analyzing companies. While no calculator can replace thorough research, they can help you better understand whether a company may represent an attractive investment opportunity.

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Each calculator focuses on a different aspect of valuation. I encourage you to use them together as part of a broader investment process rather than relying on a single metric.​

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Margin of Safety Calculator

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The Margin of Safety Calculator helps estimate what a company may be worth based on its intrinsic value while applying a margin of safety before investing. Buying a company below its estimated intrinsic value can provide a buffer against unexpected events and reduce the risk of overpaying.

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Whether you use a 30%, 40%, or 50% margin of safety depends on your own investment philosophy and confidence in the business.

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Ten Cap Calculator

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The Ten Cap Calculator estimates the return you receive from a business based on its free cash flow relative to the purchase price. This valuation method focuses on the cash a company generates for its owners and provides a quick way to compare different investment opportunities.

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While no single metric tells the whole story, I find it to be a useful addition to my overall valuation process.

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Payback Time Calculator

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The Payback Time Calculator estimates how many years it may take for a company's future growth to repay your original investment. It's a simple way to think about valuation by combining business growth with the price you pay today.

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Although this calculation relies on assumptions about future growth, it provides another useful perspective when comparing investment opportunities.​

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Why I Built These Tools

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Every company analysis on InvestSeekers follows a consistent investment framework. These calculators were created to simplify some of the calculations behind that process and make them available to everyone.

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They are designed to support your own research, not replace it. I always combine these calculations with an assessment of a company's competitive advantages, management quality, financial strength, and long term growth prospects before making an investment decision.

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Get Started

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Choose one of the calculators above and begin analyzing your next investment opportunity. Used together with thorough research and a long term mindset, these tools can help you make more informed investment decisions.

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© 2020 by Glenn Jørgensen.

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