Business Valuation Calculator

Value your business using multiple professional methods: DCF (Discounted Cash Flow), revenue multiples, EBITDA multiples, P/E ratio, and asset-based valuation. Get a comprehensive valuation range.

Revenue Multiple: Value = Revenue * Multiple | EBITDA Multiple: Value = EBITDA * Multiple | P/E Method: Value = Net Income * P/E Ratio | Asset-Based: Value = Total Assets - Liabilities | DCF: Enterprise Value = Σ(FCF/(1+r)^t) + Terminal Value/(1+r)^n where Terminal Value = FCF_n * (1+g)/(r-g)
Example: $2M revenue, $400k EBITDA (20% margin), $300k FCF. Using 2.5x revenue = $5M, 5x EBITDA = $2M, DCF @ 15% discount, 10% growth = $2.8M. Average valuation: $3.3M, Range: $2M-$5M. Rule of 40: 30 (10% growth + 20% margin).

What valuation method should I use for my business?

Use DCF for established businesses with predictable cash flows. Use multiples (revenue/EBITDA) for comparison to similar companies or quick estimates. Use asset-based for asset-heavy businesses or liquidation scenarios. SaaS companies often use revenue multiples (5-10x ARR). Most accurate approach: use multiple methods and triangulate to a range.

What is a good EBITDA multiple for small businesses?

Small businesses typically trade at 2-4x EBITDA. Main Street businesses (under $1M EBITDA): 2-3x. Lower middle market ($1-5M EBITDA): 3-5x. Middle market ($5M+ EBITDA): 5-8x. SaaS/tech can be 8-15x+ EBITDA. Multiples vary by industry, growth rate, customer concentration, and market conditions.

How do I calculate the discount rate for DCF?

Discount rate = Risk-free rate + Risk premium. For small businesses: 15-25% typical. Established companies: 8-12%. Use WACC (Weighted Average Cost of Capital) for leveraged businesses. Higher risk = higher discount rate = lower valuation. Consider industry, size, market position, and customer concentration when setting the rate.

What is the difference between enterprise value and equity value?

Enterprise Value = Total company value including debt. Equity Value = Value to shareholders only. Formula: Equity Value = Enterprise Value - Net Debt + Cash. EBITDA multiples give Enterprise Value. DCF can calculate either depending on cash flow used. For buyers: Enterprise Value matters. For sellers/investors: Equity Value matters.

How accurate are business valuations?

Valuations are estimates, not precise science. Professional valuations typically provide a range (+/-15-20%). Factors affecting accuracy: financial data quality, market comparables, growth assumptions, and market conditions. Use multiple methods to establish a reasonable range. Final price depends on negotiation, deal structure, and market timing.

What is the terminal value in DCF analysis?

Terminal Value represents the business value beyond your projection period (typically 5-10 years). It usually accounts for 60-80% of total DCF value. Two methods: Gordon Growth Model (perpetual growth) or Exit Multiple. Conservative perpetual growth: 2-3% (GDP growth). Exit multiple: apply industry EBITDA multiple to final year.