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PPP–SIRRIPA AIFinancial valuation assistant

PPP–SIRRIPA Calculator

MVP VERSION · DETERMINISTIC CALCULATIONS

From valuation to a prospective return.

Evaluate a stock with the PPP–SIRRIPA framework using explicit, auditable and editable assumptions.

✦PPP–SIRRIPA Framework originated and developed by Rainsy Sam

ASSUMPTION · POSITIVE EPS · k = 0
PPP =log [1 + (PE)(ḡ − r1 + r)]log (1 + ḡ1 + r)
ḡ =g + r2

In the standard formula, earnings growth is assumed to move linearly from its initial level g to the discount rate r at the PPP horizon. The average rate ḡ = (g + r) / 2 is used in the PPP calculation.

02

Valuation results

● Coherent assumptions
Interpretable calculation

No economic-plausibility threshold is triggered by the assumptions or results.

PPP14,36Valuation horizon · years
SIRR4,95%Earning-power return
SPARR12,13%Repricing return
SIRRIPA17,68%Total prospective return
SRP13,18 ppStock risk premium
✦

Assisted reading

Company X has a PPP of 14,36 years. Its 17,68% SIRRIPA is above the 4,50% risk-free rate, producing a 13,18 percentage-point stock risk premium. Prospective risk compensation appears substantial.

03

SIRRIPA sensitivity

Variation in g and r around the central scenario
r \ g
17,0%
20,0%
23,0%
7,5%
15,21%
16,37%
17,51%
9,5%
16,50%
17,68%
18,83%
11,5%
17,76%
18,97%
20,14%
SIRRIPA ≥ RfSIRRIPA < RfCentral scenario
04

Method and audit trail

Forecast years directly incorporated
k = 0
P/E calculated
20,00×
CAPM discount rate (r)
9,50%
Average growth rate
14,75%
Estimated terminal EPS
36,05
Exit P/E
14,36×
Prospective exit price
517,56
EPS growth multiplier
7,21×
Economic diagnosis
Coherent assumptions

Assumptions: k = 0 is the number of forecast years directly incorporated; CAPM discount rate r = Rf + β × MRP; theoretical full distribution of earnings; current EPS E0 used to calculate P/E, followed by a linear movement from initial g toward r at the PPP horizon, represented by average g = (g + r) / 2; this convention is one of five interdependent structural assumptions; exit horizon equal to PPP; exit P/E equal to PPP. SIRRIPA combines SIRR and SPARR multiplicatively.

ESSENTIAL INFORMATION

Before using the calculator

The following points will help you select the appropriate inputs and interpret the results correctly.
01

What it calculates

From valuation, earnings-growth and risk assumptions entered by the user, the calculator produces PPP, SIRR, SPARR, SIRRIPA and the Stock Risk Premium (SRP).

02

Meaning of k

k is the number of forecast earnings or loss years incorporated directly. Positive EPS uses the standard formula with implicit k = 0; Volatile earnings or transition uses the adapted formula with k from 1 to 5.

03

How to read the result

The engine is deterministic and uses manual inputs. Read the central result together with the sensitivity table and audit trail. Users remain responsible for the accuracy, relevance and date of their inputs; the outputs are estimates, not investment advice.

Current scopeThe calculator does not retrieve market data automatically and is not yet a conversational AI assistant. The same valid inputs produce the same numerical results and the same rule-based interpretation.

PUBLIC USER GUIDE

Instructions for Using the PPP–SIRRIPA Calculator

Manual inputs • deterministic calculations • transparent assumptions

PurposeThis calculator provides immediate PPP–SIRRIPA estimates from assumptions entered by the user. It is a calculation aid, not individualized investment advice.
01

Getting started

Quick start

  • Choose the earnings assumption that matches the company.
  • Enter the requested market, earnings, growth and risk assumptions.
  • Select Analyze now, then review the results, sensitivity table and audit trail together.

1. Select the language

Use the language selector to display the calculator in English or French. The calculation method is unchanged.

2. Select the earnings situation

Here, k is the number of forecast earnings or loss years directly incorporated into the PPP calculation:

  • Positive EPS — the standard PPP formula implicitly uses k = 0. Current EPS (E0) directly determines the P/E ratio, which leads to PPP; no separate forecast year is incorporated.
  • Volatile earnings or transition — the adapted formula uses k from 1 to 5. The selected value equals the number of annual forecast earnings or loss figures, E1 through Ek, incorporated directly before the continuing phase.
ImportantE0 is current EPS and is not one of the k forecast years. Ek is the last forecast EPS incorporated directly and must be positive.
02

Enter the assumptions

3. Identify the company or index

Enter a name for the case being evaluated, for example Company X. This label is used only to identify the analysis.

4. Enter the price and earnings data

For Positive EPS, enter the current share price and current earnings per share (EPS). The calculator displays the price/earnings ratio automatically:

P/E = Share price / Earnings per shareP/E is meaningful here only when current EPS is positive.

For Volatile earnings or transition, enter the current price, current EPS (E0), and each annual forecast from E1 through Ek. The explicit payback phase uses E1 through Ek; E0 is shown as the current reference value. Use negative values for losses and 0 for break-even earnings.

5. Enter the applicable EPS growth rate

For Positive EPS, enter the initial growth rate g. For Volatile earnings or transition, enter g after k: EPS from E1 through Ek are incorporated directly, so this growth rate applies only after year k. In both cases, the rate then moves linearly toward r at the PPP horizon and the corresponding average is used in the PPP calculation:

ḡ = (g + r) / 2This is one of five interdependent structural assumptions forming a coherent and closed analytical framework.
Input disciplineUse a supportable forward-looking growth assumption. A precise-looking output cannot compensate for an unrealistic input.

6. Enter the discount-rate components

Enter the risk-free rate Rf, beta β and the market risk premium MRP. The calculator derives r using the Capital Asset Pricing Model (CAPM):

r = Rf + β × MRPr = CAPM discount rate; Rf = risk-free rate; β = beta; MRP = market risk premium.
  • Beta: enter a value from 0 to 10.
  • MRP: enter a value from 0% to 10%.
  • Enter all rates as percentages in the displayed fields.
03

Run and read the analysis

7. Select Analyze now

After editing the assumptions, select Analyze now to refresh every output. Read the principal indicators together.

PPP
Potential Payback Period: the estimated valuation horizon, expressed in years.
SIRR
Stock Internal Rate of Return: the annualized earnings-power return implied by PPP.
SPARR
Stock Price Appreciation Rate of Return: the annualized appreciation from the current price to the prospective exit price.
SIRRIPA
The multiplicative combination of SIRR and SPARR.
SRP
Stock Risk Premium: SIRRIPA minus the risk-free rate.

The calculator annualizes the PPP horizon into SIRR using:

SIRR = 21PPP − 1SIRR is shown as an annual percentage.

The stock risk premium is calculated as:

SRP = SIRRIPA − RfA positive SRP means SIRRIPA exceeds the entered risk-free rate.

8. Read the assisted interpretation

The assisted-reading panel converts the calculated figures into a short standardized explanation. Its wording is deterministic: the same valid inputs produce the same calculations and the same rule-based interpretation.

Do not read one figure in isolationConsider PPP, SIRR, SPARR, SIRRIPA and SRP together, then test whether the conclusion survives reasonable changes in the assumptions.
04

Test and verify the result

9. Review SIRRIPA sensitivity

The sensitivity table varies growth g across the columns and discount rate r across the rows around the central scenario. The highlighted cell is the current central case.

  • Moving right generally tests a higher growth assumption.
  • Moving downward generally tests a higher discount rate.
  • A result that changes sharply with small input changes should be treated as fragile.

10. Review the method and audit trail

Use the audit panel to verify the intermediate assumptions and outputs used by the engine, including the selected explicit forecast period, calculated P/E where applicable, CAPM discount rate, average growth rate, estimated terminal EPS, exit P/E and prospective exit price.

Before relying on an output

  • Confirm that price and EPS use compatible per-share units and the same currency.
  • Check that beta, the risk-free rate and MRP correspond to the intended market and horizon.
  • For volatile earnings, confirm that k and the sequence of EPS values describe the intended transition.
  • Compare the central result with the sensitivity range rather than relying only on one estimate.
  • Retain a dated record of the inputs if the calculation will be cited or shared.

Important precautions

  • The calculator does not retrieve or validate live financial data. Users remain responsible for the accuracy, timing and source of every input.
  • Outputs are estimates produced by the PPP–SIRRIPA methodology and its stated approximations; they are not forecasts, guarantees or recommendations to buy, hold or sell a security.
  • Extreme or internally inconsistent assumptions may produce results that are mathematically computable but economically uninformative.
  • Independent professional review is appropriate before using the results for material investment, academic or institutional decisions.
Methodological scopeThe public calculator is presently a deterministic calculation engine. Future versions may add conversational explanations, input checks, methodological questions and scenario construction without changing the need for transparent assumptions and verifiable calculations.
Rainsy SamOriginator and Developer of the PPP–SIRRIPA Framework