Company Valuation Calculator
Estimate the market value of your business using the EBITDA Multiplier method.
Estimated Enterprise Value
$0.00
How is Company Valuation Calculated?
The Company Valuation Calculator primarily uses the EBITDA Multiplier Method, which is the industry standard for valuing small to mid-sized enterprises (SMEs). This method focuses on a company's ability to generate earnings before interest, taxes, depreciation, and amortization.
Understanding the Inputs
- EBITDA: This represents the operational profitability of the business. It strips away non-operational variables to show how much cash the core business actually generates.
- Industry Multiplier: Different sectors have different risk profiles. A tech company might have a multiplier of 8x-10x, while a retail shop might have 2x-3x. This number reflects the market's willingness to pay for future earnings.
- Cash and Debt: To move from "Enterprise Value" to "Equity Value," we add the cash the business currently holds and subtract any liabilities or debts the buyer would need to settle.
Example Calculation
Imagine a digital marketing agency with the following financials:
- Annual EBITDA: $200,000
- Industry Multiplier: 4.0x
- Cash: $30,000
- Debt: $10,000
The valuation formula would be: ($200,000 × 4.0) + $30,000 – $10,000 = $820,000.
Why Know Your Business Value?
Knowing your company's value is crucial for several strategic milestones, including preparing for an exit (sale), seeking venture capital or bank loans, or structuring partner buy-outs. Regular valuation helps owners identify which levers (increasing margins vs. increasing revenue) most effectively boost the bottom line.
Common Industry Multipliers (Estimates)
| Industry | Typical Multiplier |
|---|---|
| SaaS / Software | 6.0x – 12.0x |
| Manufacturing | 3.0x – 5.0x |
| Professional Services | 2.0x – 4.5x |
| E-commerce | 3.0x – 6.0x |