A single "fair value" number is comforting but misleading — it pretends you know the future. A Monte Carlo simulation is more honest: it runs the valuation thousands of times with the inputs jittered, and shows you the range of outcomes.
What P10 / P50 / P90 mean
- P50 (median) — the middle outcome; half the simulations landed above, half below.
- P10 — a pessimistic case; only 10% of outcomes were worse.
- P90 — an optimistic case; only 10% were better.
A wide P10–P90 spread means the deal's value is sensitive to assumptions; a narrow one means it's robust.
The number that matters most
P(asking ≤ fair value) — the probability the asking price is at or below fair value.
If that's 80%, the price looks defensible across most scenarios. If it's 30%, you're paying up for an optimistic case that may not arrive.
How to use it
Don't anchor on the median alone. Look at the downside (P10) and ask: can I still service the debt and live with the return if the pessimistic case happens? A good deal survives its own P10. GradeThisDeal simulates a ±20% revenue swing and reports both the fair-value range and the probability the debt still covers under stress.