Charles Schwab (SCHW)

Model Type: | First Forecast Year: | Discount Rate: | Effective Terminal Growth: | Return on New Capital:

What do these terms mean?
Sum of the parts (SOTP) - each division is valued on its own and the pieces are added up, rather than valuing the company as one block.
Free cash flow (FCFF) - the cash the business throws off after running costs, tax and the investment needed to keep going. It is what the valuation actually discounts.
Discount rate (WACC) - the annual return investors require. Higher rate, lower value today.
Terminal growth - how fast cash flows grow forever after the explicit forecast ends.
Enterprise value to equity bridge - the whole business is worth one number; subtract debt and add cash (and set aside anything owed to minority or preferred holders) to get what the ordinary shares are worth.
Minority interest - the slice of a consolidated subsidiary owned by someone else, so it is not available to this company's shareholders.
Preferred stock - a senior class of shares that gets paid before ordinary shareholders.
DDM (dividend discount model) - used for banks and insurers, where dividends are the cleaner measure of what reaches shareholders.
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Trefis Price
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Market Price

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Where the Trefis Price Comes From