Description
Divide cashflowPresentValue by total PV and multiply by years.
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.
Divide cashflowPresentValue by total PV and multiply by years.
When to use this tool
Use Equity Duration Cashflow Share Term when you need one transparent financial-model term.
How to use the tool and how it works
- Enter cashflowPresentValue, totalPresentValue, years. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read presentValueWeight, durationContribution. Use the output convention below.
Require positive totalPresentValue and nonnegative years. Divide cashflowPresentValue by total PV and multiply by years.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| cashflowPresentValue | Cashflow Present Value | Required. Finite number. |
| totalPresentValue | Total Present Value | Required. Finite number; strictly above 0. |
| years | Years | Required. Finite number; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| presentValueWeight | Present Value Weight | Required. Finite number. |
| durationContribution | Duration Contribution | Required. Finite number. |
{
"input": {
"cashflowPresentValue": 20,
"totalPresentValue": 100,
"years": 5
},
"output": {
"presentValueWeight": 0.2,
"durationContribution": 1
}
}Limitations and assumptions
- One contribution has time units; cashflow PV may be signed and weights are not globally checked. This is not complete equity duration or a forecast.
- 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
- Cashflow Duration Weight Term
Return presentValue/totalPresentValue and timeYears times that weight.
- Cashflow Value Contribution
Multiply cashflow by it and divide by totalValue for contribution, or return zero with contributionDefined false when total is zero.