Business valuation calculator
The calculator derives a value range from a multiple of adjusted EBIT and sets a simplified earnings value alongside it. You can see every adjustment in the table.
Enterprise value
€1.3m to €1.8m
Midpoint €1.5m | Multiple 4.0x to 5.5x EBIT
€1.3mEarnings value €1.9m€1.8m
- Equity value (price for the shares)
- €1.3m to €1.8m
- Earnings value at a 12.0% capitalisation rate
- €1.9m
- EBIT margin
- 13.3%
- equals revenue times
- 0.63
| Base range Services and consulting | 4.0x to 5.5x |
|---|---|
| EBIT €250k to €1m | ±0 |
| Revenue stable | ±0 |
| moderate dependence on the owner | −0.25 |
| broad customer base | ±0 |
| some recurring revenue | +0.25 |
| Result | 4.0x to 5.5x |
A guide, not a formal valuation. Base ranges and adjustments are assumptions by inotoken. The earnings value assumes, for simplicity, 30% tax on EBIT.
How to use the calculator
- Choose the industry. It sets the base range of the multiple.
- Enter adjusted EBIT: earnings before interest and tax, corrected for a market-rate managing director salary and one-off items.
- Size, growth, owner dependence, customer concentration and recurring revenue move the multiple.
- Deduct net financial debt to get from enterprise value to the price for the shares.
Frequently asked questions
How accurate is the result?
The calculator gives a guide, not a formal valuation. The ranges are assumptions by inotoken for small and medium-sized businesses. For negotiations and financing, a professional valuation is advisable.
Why does it use EBIT rather than revenue?
Buyers pay for the earnings a business will generate. Two firms with the same revenue can have very different profits, so revenue only serves to check the margin.
What is the capitalisation rate?
It expresses the return a buyer expects for the risk. The higher the risk, the higher the rate and the lower the earnings value.