Business Valuation Calculator
Estimate your business’s true value using earnings, growth, and risk. Built for owners, buyers, and investors to make smarter decisions with a reliable DCF-based model.
Embed or Credit this Calculator
Loved by 50,000+ AI creators
FAQs
What Does This Business Valuation Calculator Do?
It estimates the current value of a business by analyzing earnings (EBITDA), growth expectations, and risk, using a Discounted Cash Flow (DCF) approach.
What Is EBITDA and Why Is It Used?
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a standard metric used to assess a business's core operating performance without external financial factors.
What Is Excess Compensation and Why Should I Include It?
Excess compensation is any amount paid to owners above market rate. Adding it back to EBITDA reflects the true profit potential of the business as if it were run by a non-owner operator.
How Does the Growth Rate Affect the Valuation?
The anticipated growth rate projects how earnings will increase over time. A higher growth rate leads to a higher future earnings estimate and, therefore, a higher valuation.
Why Do I Need to Select a Number of Years for Earnings Continuation?
This sets the projection period for how long you expect the business to maintain its current performance. The calculator uses this to model future cash flow before applying a terminal value.
What Does the Risk Level Represent in This Tool?
Risk level reflects the uncertainty of future earnings and maps to a discount rate. Higher risk levels mean a higher discount rate, which reduces the present value of future cash flows.
What Is a Discounted Cash Flow (DCF) Valuation?
DCF valuation calculates the present value of projected future earnings by discounting them based on time and risk. It’s widely used in business valuation for its forward-looking approach.
Can I Use This Calculator for Any Industry?
Yes, the logic is industry-agnostic. However, for highly specialized businesses, you may want to consult with a professional for industry-specific adjustments or benchmarks.
Is This Calculator Suitable for Early-Stage or Pre-Revenue Businesses?
This calculator is best for businesses with stable earnings. For pre-revenue or early-stage startups, a different valuation model like the VC or Scorecard Method would be more appropriate.
How Accurate Is the Valuation Generated?
The calculator provides a strong estimate based on your inputs and standard valuation principles. However, it’s not a replacement for a full financial review by a certified business appraiser.
