Value a business using earnings multiples, revenue multiples and discounted cash flow.
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.
Business Valuation
Enterprise value = EBITDA × multiple; equity value deducts net debt; perpetuity = CF ÷ (r − g)
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.
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.
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.
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.