Terminal value is the value of a company's assets after all future cash flows have been discounted to their present value.
Terminal Value is an important concept for two reasons. First, it helps investors determine the right time to sell their shares in a company. Second, it can be used to determine the valuation of a company.
The Terminal Value is calculated by multiplying all of the cash flows that will be generated by an asset and then discounting them back to the present day using some sort of discount rate.