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.
Inputs explained
| Field | What to enter |
|---|---|
| Valuation method | Choose one: Discounted cash flow, Asset-based, Market capitalisation, Industry multiple |
| Annual free cash flow (this year) | Amount in your currency |
| Cash flow growth per year | In % |
| Projection period | In years |
| Discount rate | In % |
| Terminal growth rate | In % |
| Total assets | Amount in your currency |
| Total liabilities | Amount in your currency |
| Shares outstanding | A number |
| Share price | Amount in your currency |
| Metric (EBITDA, revenue or net profit) | Amount in your currency |
| Industry multiple | In × |
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 value |
|---|---|
| 125,000 | 1,493,843.98 |
| 187,500 | 2,240,765.97 |
| 250,000 | 2,987,687.96 |
| 312,500 | 3,734,609.96 |
| 375,000 | 4,481,531.95 |
| 500,000 | 5,975,375.93 |
Formula
DCF: Σ CF × (1 + g)^t ÷ (1 + r)^t + terminal value
Asset-based: assets − liabilities
Market capitalisation: shares × price
Multiple: metric × industry multiple
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 %.
Results: Business value = $2,987,687.96; Terminal value share of DCF value = 65.38 %.
Frequently asked questions
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, so 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.