# Business Valuation Calculator

URL: https://speedycalculator.com/calculators/finance/business-valuation/
Last updated: 2026-10-25

> The business valuation calculator estimates what a company is worth with four methods: discounted cash flow, net assets, market capitalisation, or an industry multiple of EBITDA, revenue or profit.

## Inputs

- Valuation method
- Annual free cash flow (this year)
- Cash flow growth per year (%)
- Projection period (years)
- Discount rate (%)
- Terminal growth rate (%)
- Total assets
- Total liabilities
- Shares outstanding
- Share price
- Metric (EBITDA, revenue or net profit)
- Industry multiple (×)

## Results

- Business value
- Terminal value share of DCF value

## Formula

```
DCF: Σ CF × (1 + g)^t ÷ (1 + r)^t + terminal value
Asset-based: assets − liabilities
Market capitalisation: shares × price
Multiple: metric × industry multiple
```

## Explanation

There is no single "right" value for a business. Investors usually look at several methods: a DCF for the value of future cash, the asset value as a floor, and multiples of similar companies as a market check.

### How to use the Business Valuation Calculator

- **Valuation method**
- **Annual free cash flow (this year)**
- **Cash flow growth per year**
- **Projection period**
- **Discount rate**
- **Terminal growth rate**
- **Total assets**
- **Total liabilities**
- **Shares outstanding**
- **Share price**
- **Metric (EBITDA, revenue or net profit)**
- **Industry multiple**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Choose a method and enter the figures it needs.

### Tips

- Use figures for the same period (a month, a quarter or a year) for every input so ratios compare like with like.
- Track the metric over time – the trend usually tells you more than a single value.
- Compare your result with industry benchmarks, which vary a lot between sectors.
- Treat the result as a starting point for a decision, then check the assumptions behind each input.

### Common mistakes to avoid

- Mixing monthly and yearly numbers in the same calculation.
- Using revenue where the formula needs profit (or the other way round).
- Forgetting hidden costs such as taxes, fees, overheads or your own time.

### Inputs explained

FieldWhat to enterValuation methodChoose one: Discounted cash flow, Asset-based, Market capitalisation, Industry multipleAnnual free cash flow (this year)Amount in your currencyCash flow growth per yearIn %Projection periodIn yearsDiscount rateIn %Terminal growth rateIn %Total assetsAmount in your currencyTotal liabilitiesAmount in your currencyShares outstandingA numberShare priceAmount in your currencyMetric (EBITDA, revenue or net profit)Amount in your currencyIndustry multipleIn ×

### Example values

How the main result changes when **Annual free cash flow** changes and everything else stays at the example values above:

Annual free cash flow (this year)Business value125,0001,493,843.98187,5002,240,765.97250,0002,987,687.96312,5003,734,609.96375,0004,481,531.95500,0005,975,375.93

## Worked example

Inputs — Valuation method: Discounted cash flow; Annual free cash flow (this year): $250,000; Cash flow growth per year: 5 %; Projection period: 5 years; Discount rate: 12 %; Terminal growth rate: 2.5 %; Total assets: $1,500,000; Total liabilities: $600,000; Shares outstanding: 1,000,000; Share price: $4.5; Metric (EBITDA, revenue or net profit): $400,000; Industry multiple: 6 ×.

Results — **Business value = $2,987,687.96**; Terminal value share of DCF value = 65.38 %.

## FAQ

**What is the most common way to value a small business?**
A multiple of earnings (often seller's discretionary earnings or EBITDA).

**Why does the DCF value change so much?**
It is sensitive to the discount and growth rates – small changes move it a lot.

**What is a typical EBITDA multiple?**
Small private companies often sell for 3–6× EBITDA; it varies by industry and size.

**What formula does the Business Valuation Calculator use?**
DCF: Σ CF × (1 + g)^t ÷ (1 + r)^t + terminal value.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)