Business Valuation Calculator

Value a business using earnings multiples, revenue multiples and discounted cash flow.

About Business Valuation Calculator

Multiples give enterprise value, so net debt must be deducted to reach what shareholders receive. The perpetuity model is acutely sensitive to the gap between discount and growth rates, which is why small changes there swing the result widely. Three methods rarely agree, and the spread between them is itself informative: a wide spread usually means the multiple assumptions are not consistent with the cash flow profile.

Formula

Business Valuation

Enterprise value = EBITDA × multiple; equity value deducts net debt; perpetuity = CF ÷ (r − g)

enterprise value: The value of the business operations, before debt
equity value: What shareholders receive, after deducting net debt

Worked example

With the default values below, Business Valuation Calculator returns Equity Value on the EBITDA Multiple of $2,680,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual revenueminimum 0: 2,400,000
EBITDAminimum 0: 480,000
EBITDA multipleaccepts 0–30 x: 6 x
Revenue multipleaccepts 0–20 x: 1.4 x
Net debtminimum -10,000,000: 200,000
Discount rateaccepts 1–50 %: 15 %
Long term growth rateaccepts -10–20 %: 3 %

Results

Equity Value on the EBITDA Multiple: $2,680,000.00
Enterprise Value on the EBITDA Multiple: $2,880,000.00
Valuation on the Revenue Multiple: $3,360,000.00
Discounted Cash Flow Perpetuity Value: $4,120,000.00
EBITDA Margin: 20.00%

Step by step

1Values used
2Business Valuation
3Equity Value on the EBITDA Multiple= 2,680,000.00
4Enterprise Value on the EBITDA Multiple= 2,880,000.00
5Valuation on the Revenue Multiple= 3,360,000.00
6Discounted Cash Flow Perpetuity Value= 4,120,000.00
7EBITDA Margin= 20.00

Assumptions and limits

The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Business valuation depends on many factors this cannot capture, including customer concentration, quality of earnings, working capital and transaction structure. This is an illustration, not a valuation or investment advice. Obtain professional advice for any transaction.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Business valuation depends on many factors this cannot capture, including customer concentration, quality of earnings, working capital and transaction structure. This is an illustration, not a valuation or investment advice. Obtain professional advice for any transaction.

Frequently Asked Questions

How is Business Valuation calculated?

Enterprise value = EBITDA × multiple; equity value deducts net debt; perpetuity = CF ÷ (r − g) Multiples give enterprise value, so net debt must be deducted to reach what shareholders receive. The perpetuity model is acutely sensitive to the gap between discount and growth rates, which is why small changes there swing the result widely.

Why does Business Valuation matter?

Three methods rarely agree, and the spread between them is itself informative: a wide spread usually means the multiple assumptions are not consistent with the cash flow profile.

What values do I need to enter?

This calculator takes 7 inputs: Annual revenue, EBITDA, EBITDA multiple, Revenue multiple, Net debt, Discount rate, Long term growth rate. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.