Business Valuation Calculator

It estimates the current value of a business by analyzing earnings (EBITDA), growth expectations, and risk, using a Discounted Cash Flow (DCF) approach.

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.

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.

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.

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.

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.

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.

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.

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.

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.