Estimate the market value of your company using the SDE/EBITDA earnings multiple method.
Estimated Enterprise Value
$0.00
How This Valuation Works
This calculator uses the Income Approach, specifically the Seller's Discretionary Earnings (SDE) or EBITDA multiple method. This is the most common way to value small-to-medium-sized businesses (SMBs).
The formula applied is:
(Annual Revenue × Profit Margin) × Industry Multiple – Net Debt = Valuation
Understanding the Inputs
Annual Revenue: The total gross income your business generates in a year before any expenses.
Profit Margin: The percentage of revenue left after all operating expenses, taxes, and interest. For many SMBs, "SDE" (Seller's Discretionary Earnings) is used instead of net profit.
Earnings Multiple: This factor varies by industry. A local service business might trade at a 2x multiple, while a SaaS company might trade at 6x or higher.
Net Debt: Any long-term liabilities or debt that a buyer would need to clear or assume, which reduces the final take-home value.
Valuation Examples
Business Type
Annual Profit
Common Multiple
Est. Value
Local HVAC/Plumbing
$200,000
2.5x
$500,000
E-commerce Brand
$500,000
3.5x
$1,750,000
Software (SaaS)
$1,000,000
6.0x
$6,000,000
Why Get a Valuation?
Knowing your business's worth is critical for exit planning, securing investment, or partnership buy-outs. Keep in mind that external factors like market conditions, recurring revenue strength, and owner-dependency significantly impact the final "Multiple" a buyer is willing to pay.
function calculateBusinessValue() {
var revenue = parseFloat(document.getElementById("valRevenue").value);
var margin = parseFloat(document.getElementById("valMargin").value);
var multiple = parseFloat(document.getElementById("valMultiple").value);
var debt = parseFloat(document.getElementById("valDebt").value);
// Validation
if (isNaN(revenue) || isNaN(margin) || isNaN(multiple) || isNaN(debt)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Calculation Logic
var annualProfit = revenue * (margin / 100);
var baseValue = annualProfit * multiple;
var finalValuation = baseValue – debt;
// Formatting currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0,
});
// Display Result
document.getElementById("valDisplay").innerText = formatter.format(finalValuation);
document.getElementById("valBreakdown").innerText = "Based on Annual Profit of " + formatter.format(annualProfit) + " at a " + multiple + "x multiple.";
document.getElementById("valResultArea").style.display = "block";
}