Business Valuation Calculator
Estimate your business value using revenue multiples, EBITDA multiples, or discounted cash flow (DCF) analysis. Compare industry benchmarks and explore different scenarios. Works with any currency.
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How to Use This Calculator
Tab "Revenue Multiple"
Enter your annual revenue, select an industry to see typical multiples, and adjust the applied multiple. The calculator shows the implied valuation along with the low and high range for your industry. Best suited for high-growth companies where revenue growth matters more than current profitability.
Tab "EBITDA Multiple"
Enter your EBITDA (earnings before interest, taxes, depreciation & amortisation), select an industry, and adjust the multiple. EBITDA multiples are the most commonly used valuation metric for profitable businesses, as they normalise for capital structure and tax differences.
Tab "DCF Analysis"
Enter your current free cash flow, expected annual growth rate for 5 years, discount rate (WACC), and terminal growth rate. The calculator projects cash flows, discounts them to present value, and adds a terminal value using the Gordon Growth Model. DCF is the most theoretically sound method but is highly sensitive to assumptions.
The Formulas
Valuation = Annual Revenue × Revenue Multiple
EBITDA multiple valuation:
Valuation = EBITDA × EBITDA Multiple
DCF valuation:
Value = Σ [FCF_t / (1 + r)^t] + Terminal Value / (1 + r)^n
Terminal value (Gordon Growth Model):
Terminal Value = FCF_final × (1 + g) / (r − g)
Where r = discount rate, g = terminal growth rate, n = projection years (5)
All calculations are universal and pre-tax. No country-specific regulations or tax adjustments are applied. Results are estimates for informational purposes only.
Worked Examples
Example 1 — SaaS company: $2M ARR × 8x revenue multiple
A SaaS company with $2 million in annual recurring revenue growing at 40% year-over-year with strong net revenue retention. Typical SaaS revenue multiples range from 5x to 15x.
An 8x multiple is mid-range for SaaS, reflecting solid growth but not hyper-growth territory. Companies growing faster than 50% or with net retention above 130% command the higher end of the range.
Example 2 — Manufacturing business: $1.2M EBITDA × 6x
A manufacturing business generating $1.2 million in EBITDA with stable margins, a diversified customer base, and long-term contracts. Manufacturing EBITDA multiples typically range from 4x to 8x.
A 6x EBITDA multiple is solid for manufacturing, suggesting good operational performance and reasonable growth prospects. Higher multiples require proprietary technology, strong IP, or significant recurring revenue.
Example 3 — DCF: $500K FCF, 10% growth, 12% discount, 3% terminal
A growing business with $500,000 in current free cash flow, expected to grow at 10% per year for 5 years. The discount rate is 12% (WACC) and the terminal growth rate is 3%.
Note that the terminal value represents roughly 69% of the total valuation, which is typical for DCF analyses. The result is highly sensitive to the discount rate and terminal growth assumptions — changing the discount rate from 12% to 10% would increase the valuation significantly.
Understanding Business Valuation Methods
When to use each method
Revenue multiples work best for high-growth companies that may not yet be profitable. SaaS, marketplace, and tech companies are commonly valued this way because investors pay for revenue growth and market capture.
EBITDA multiples are the workhorse of business valuation for profitable companies. They normalise for capital structure differences and are the most commonly quoted metric in M&A transactions.
DCF analysis is the most theoretically rigorous method. It works best when you can make reasonable projections about future cash flows. It is the standard for large corporate valuations and investment banking.
Key factors affecting multiples
Industry multiples are averages. Your specific business may warrant a premium or discount based on: growth rate (faster growth = higher multiple), profit margins (higher margins = higher multiple), customer concentration (diversified base = higher multiple), recurring revenue (subscriptions = higher multiple), and market position (leader = higher multiple).
Frequently Asked Questions
What is the difference between enterprise value and equity value?
Enterprise value (EV) is the total value of a business including debt minus cash. Equity value is what the owners would receive after paying off all debt. Revenue and EBITDA multiples typically produce enterprise value. To get equity value, subtract net debt (total debt minus cash).
Are these multiples based on real market data?
The ranges shown are based on publicly observed transaction multiples and public market data. However, actual multiples vary significantly by company size, growth rate, geography, and market conditions. For a formal valuation, consult a professional business appraiser or investment banker.
Should I use revenue or EBITDA multiples?
Use revenue multiples for high-growth, pre-profit, or early-stage companies where revenue trajectory matters more than current earnings. Use EBITDA multiples for established, profitable businesses where earnings quality and stability are the primary value drivers. Most sophisticated buyers consider both.
What terminal growth rate should I use in DCF?
Terminal growth rate should not exceed the long-term GDP growth rate of the economy (typically 2-3% for developed markets). Using a higher rate implies the company will eventually grow larger than the entire economy, which is unrealistic. Most DCF models use 2-3%.
Can I use this for startup valuations?
This calculator works best for businesses with meaningful revenue or cash flows. Early-stage startups with little or no revenue are typically valued using methods like comparable fundraising rounds, scorecard method, or venture capital method, which are not covered here.