Business Valuation Calculator
Estimate what a business is worth using three methods — an earnings (SDE / EBITDA) multiple, a revenue multiple and a discounted cash flow — and get a conservative, realistic and optimistic valuation range.
Input
Total sales over the last 12 months.
Seller's discretionary earnings (SDE) for an owner-run business, or EBITDA for a larger one. Enter a negative number for a loss.
Typical ranges: 2–4× SDE for small businesses, 4–8× EBITDA for mid-size, higher for fast-growing SaaS.
Typical ranges: 0.3–1× for retail and services, 1–3× for e-commerce and agencies, 3–10× for SaaS.
Expected annual profit growth over the projection period. Used by the discounted cash flow.
The return a buyer demands for the risk. Roughly 10–15% for stable companies, 20–30% for small businesses, 30%+ for early-stage startups.
How many years of profit the discounted cash flow projects before the terminal value.
Long-run growth after the projection period. Keep it near inflation (2–3%) and below the discount rate.
Output
| Metric | Value |
|---|---|
| No data yet | |
More ways to use this tool
REST API
curl -X POST https://api.iotools.cloud/v1/tool/business-valuation-calculator \
-H "Authorization: Bearer YOUR_API_KEY" \
-H "Content-Type: application/json" \
-d '{
"annualRevenue": "500000",
"annualProfit": "120000",
"profitMultiple": "3",
"revenueMultiple": "1",
"growthRate": "10",
"discountRate": "20",
"years": "5",
"terminalGrowth": "2.5"
}'Swap in your own key from your account. The tool's fields are the body — no wrapper.
Ask an AI agent
Use the IOTools `business-valuation-calculator` tool (Business Valuation Calculator) on this input:
YOUR_INPUT_HEREPaste this at any agent connected to the IOTools MCP server, then add your input.
Embed widget
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<script src="https://iotools.cloud/embed.js" async></script>Drop this into your own page — free, no key required, just a link back.
| Cost per API/MCP call | From 5 credits |
|---|---|
| Need more credits? | View pricing |
Also available with
Guides
This business valuation calculator estimates what a company is worth using the three methods buyers, brokers and investors actually use, then shows you the spread between them as a conservative, realistic and optimistic figure. Nothing is hidden behind a black box: each number comes from a stated formula and the inputs you typed.
How to use it
- Enter your annual revenue and annual profit for the last 12 months. For an owner-run business, profit should be seller's discretionary earnings (SDE): net profit plus the owner's salary and one-off expenses. For a larger company, use EBITDA.
- Set an earnings multiple and a revenue multiple for your industry. The help text under each field lists typical ranges.
- For the discounted cash flow, enter expected profit growth, a discount rate that reflects how risky the business is, the number of projection years, and a terminal growth rate.
The table updates as you type. Copy it or download it as CSV.
The three methods
Earnings multiple = Annual Profit × Multiple. The most common way small and mid-size businesses change hands. The multiple rises with size, growth, recurring revenue and how little the business depends on its owner.
Revenue multiple = Annual Revenue × Multiple. Used when profit is thin, negative, or deliberately reinvested — typical for SaaS and fast-growing startups.
Discounted cash flow (DCF) projects profit forward at your growth rate, discounts each year back to today at your discount rate, and adds a terminal value for everything after the projection period:
- Present value of year t = Profit × (1 + Growth)t ÷ (1 + Discount)t
- Terminal value = Final-year Profit × (1 + Terminal Growth) ÷ (Discount − Terminal Growth), discounted back the same way
The conservative estimate is the lowest of the methods that could be calculated, the optimistic is the highest, and the realistic is their average.
Which multiple should I use?
Look for recent sales of comparable businesses in your industry and size band — broker reports and marketplace listings publish them. As a rough guide, owner-operated small businesses sell for 2–4× SDE, established mid-size companies for 4–8× EBITDA, and SaaS companies are usually quoted on revenue at 3–10× ARR.
Why do the three methods disagree?
They measure different things. Multiples reflect what the market is paying today; a DCF reflects what your own growth and risk assumptions imply. A wide gap is useful information — a DCF far above the multiples usually means the growth rate is optimistic or the discount rate is too low.
What discount rate is reasonable?
It is the annual return a buyer would demand for taking on the risk. Stable, established companies sit around 10–15%, small private businesses 20–30%, and early-stage startups 30% or more. The discount rate must be higher than terminal growth, or the terminal value formula has no meaning.
What if the business is losing money?
Enter the loss as a negative profit. The earnings multiple and DCF are skipped, and the valuation rests on the revenue multiple alone. To see when the business turns profitable, use the Break-Even Point Calculator; to check the customer economics behind the revenue, use the Customer Lifetime Value Calculator.
Is this a formal valuation?
No. It is a planning estimate. A sale, a funding round, a divorce or a tax filing needs a qualified appraiser who can examine the books, the assets and the debt.
Privacy
The calculation runs entirely in your browser. Your revenue and profit figures are never uploaded or stored, and there is no sign-up.