Estimate a business value from profit times a multiple.
The earnings multiple method values a firm as annual profit times a market-observed multiple, which varies by industry, growth and risk. Multiples translate one year of earnings into a defensible asking price, but owner-replaced labor must be normalized before the profit is real.
Earnings Multiple Valuation
Value = annual net profit x earnings multiple
Value = annual net profit x earnings multiple The earnings multiple method values a firm as annual profit times a market-observed multiple, which varies by industry, growth and risk.
Multiples translate one year of earnings into a defensible asking price, but owner-replaced labor must be normalized before the profit is real.
This calculator takes 2 inputs: Annual net profit, Valuation multiple. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.