A fast and cheap method for calculating a simple indication of value. This valuation method refers to a mechanistic technique whereby data, often based on past performance, is entered into a simplified and unseen model for calculating a company’s value. Whilst this method is fast and cheap (it’s often even offered for free on–line), it can only offer a simple ‘ball-park’ indication of value. In particular, as a potential seller, this method tends to understate value and does not identify the drivers of value. Alpha Financials strongly advises against the use of the black box approach and promotes the use of a Discounted Cash Flow (DCF) approach.