There are several terminal value formulas. Like discounted cash flow (DCF) analysis, most terminal value formulas project future cash flows to return the present value of a future asset. The liquidation value model (or exit method) requires figuring the asset's earning power with an appropriate discount rate, then adjusting for the estimated value of outstanding debt. The stable (perpetuity) growth model does not assume the company will be liquidated after the terminal year. Instead, it assumes that cash flows are reinvested and that the firm can grow at a constant rate into perpetuity. The multiples approach uses the approximate sales revenues of a company during the last year of a discounted cash flow model, then uses a multiple of that figure to arrive at the terminal value without further discounting applied.