Description
Return presentValue/totalPresentValue and timeYears times that weight.
A financial model connects supplied rates, discount factors, cashflows or prices under a particular convention. A local identity or residual is not a complete valuation, an observed market relationship or a promise of future returns.
Return presentValue/totalPresentValue and timeYears times that weight.
When to use this tool
Use Cashflow Duration Weight Term when you need one transparent financial-model term.
How to use the tool and how it works
- Enter presentValue, totalPresentValue, timeYears. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read valueWeight, durationContributionYears. Use the output convention below.
Require nonzero totalPresentValue. Return presentValue/totalPresentValue and timeYears times that weight.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| presentValue | Present Value | Required. Finite number. |
| totalPresentValue | Total Present Value | Required. Finite number. |
| timeYears | Time Years | Required. Finite number. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| valueWeight | Value Weight | Required. Finite number. |
| durationContributionYears | Duration Contribution Years | Required. Finite number. |
{
"input": {
"presentValue": 80,
"totalPresentValue": 200,
"timeYears": 3
},
"output": {
"valueWeight": 0.4,
"durationContributionYears": 1.2
}
}Limitations and assumptions
- Times, PVs and weights may be signed. This is one duration contribution in years, not complete modified duration or a validated cashflow model.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use a complete model matching the instrument, cashflows and market conventions. Review compounding, timing, currency, uncertainty and omitted costs before using a local estimate in a financial decision.
References
Similar or alternative tools
- Equity Duration Cashflow Share Term
Divide cashflowPresentValue by total PV and multiply by years.
- Cashflow Value Contribution
Multiply cashflow by it and divide by totalValue for contribution, or return zero with contributionDefined false when total is zero.