Business Valuation Calculator
Indicative valuation on three multiple bases. Multiples value the enterprise, and net debt must be subtracted to reach what the shares are worth, which is the step most often skipped.
Also called: company valuation calculator, business worth.
$104,000,000.00 on the EBITDA basis, from an enterprise value of $116,000,000.00 less 12,000,000 of net debt. The revenue basis gives $111,000,000.00 and the earnings basis $129,000,000.00, a spread of 24%.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
How this is calculated
An EBITDA multiple gives enterprise value, the worth of the operating business regardless of how it is financed. Equity value is what remains after repaying net debt, and forgetting that step overstates what a seller receives by exactly the debt. Three bases are shown because they rarely agree: a wide spread means the multiples are not consistent with each other and at least one is wrong for this business.
multiples value the business; subtracting net debt values the shares- m
- Multiple
- EV
- Enterprise value
Method and limits
What it assumes
- Multiples are supplied by you and are the entire answer. Nothing here selects an appropriate one.
What it deliberately does not model
- This is not a valuation. Real valuations require comparable transactions, diligence and a professional opinion.
- Small private businesses trade at large discounts to listed multiples for illiquidity and key-person risk.
- Normalising earnings for owner compensation and one-offs usually changes the answer more than the multiple does.
Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator
Frequently asked questions
- Which multiple should I use?
- Whatever comparable businesses in your sector have actually transacted at. A multiple picked without evidence is a guess wearing a formula.
- Why subtract debt?
- Because the buyer inherits it. An enterprise worth ten crore with three crore of debt is worth seven crore to the shareholders.