Business Valuation Calculator - EBITDA, SDE and DCF

A business valuation calculator estimates what a company may be worth from earnings, revenue, free cash flow, and balance sheet adjustments. Use it before pricing a sale, screening an acquisition, discussing partner buyouts, preparing lender conversations, or testing whether an asking price is supported by operating results.

• • Owner sale planning: Estimate a defensible range before speaking with brokers, buyers, or advisors.
• • Acquisition screening: Compare a target company's asking price with earnings, revenue, debt, and cash.
• • Partner or shareholder discussions: Create a neutral starting point before legal documents define a formal process.
• • Lender preparation: Check whether cash flow, leverage, and valuation assumptions tell the same story.

The calculator is built for quick scenario work, not for tax filings, litigation, estate plans, fairness opinions, or purchase agreements. Private company valuation depends on industry risk, customer concentration, owner dependence, working capital needs, debt terms, taxes, and deal structure. Treat the output as a structured estimate that helps you ask better questions.

The blended value is most useful when the methods point to a similar range. If one method is far away from the others, inspect the input behind it. A revenue multiple can overstate a low-margin company, while a DCF can swing sharply when discount and terminal growth assumptions are too optimistic.

If you are comparing a purchase price with expected gains after acquisition, the Return on Investment Calculator helps translate valuation into investor return.

The calculator builds several enterprise-value estimates, converts each to equity value, then averages the usable methods.

• Revenue multiple value: Annual revenue multiplied by the selected revenue multiple.
• EBITDA multiple value: Normalized EBITDA multiplied by the selected EV/EBITDA multiple.
• SDE multiple value: Seller discretionary earnings multiplied by the selected SDE multiple.
• DCF value: Five years of projected free cash flow plus terminal value, discounted at the selected required return.
• Cash and debt adjustment: Cash and non-operating assets increase equity value; interest-bearing debt reduces it.

Enterprise value looks at the operating business before excess cash and interest-bearing debt. Equity value is closer to what owners may receive before taxes, transaction costs, working capital adjustments, escrow, and negotiated price changes. The calculator displays method-level equity values so you can see which assumption is driving the blend.

The DCF method uses year-one free cash flow, grows it for five years, discounts those cash flows, and adds a terminal value. The terminal formula is only meaningful when the discount rate is higher than terminal growth. If that relationship fails, the calculator skips DCF and tells you why.

According to CFA Institute, firm value can be estimated as the present value of expected FCFF discounted at WACC, and constant-growth firm value equals FCFF1 divided by WACC minus growth.

According to CFA Institute, enterprise value multiples compare the market value of an entire enterprise with fundamentals such as EBITDA, sales, or operating cash flow.

When the DCF result is highly sensitive to required return, use the Discount Rate Calculator to pressure-test the rate before relying on the valuation.

A few terms decide whether the output is useful or misleading.

No single method fits every company. EBITDA is often useful for established businesses with meaningful earnings. SDE can be more practical for owner-operated firms. Revenue multiples can help when margins are temporarily distorted, but they ignore cost structure. DCF is flexible, yet sensitive to long-term assumptions.

Use consistent definitions when comparing methods. If your EBITDA excludes a one-time expense, make sure the selected multiple comes from companies or transactions adjusted in a similar way.

For a debt-heavy company, the Cash Flow to Debt Calculator gives another view of whether operating cash flow can support the leverage assumed in the valuation.

Start with normalized numbers, then test several assumption sets instead of relying on one pass.

1. 1 Enter revenue and revenue multiple: Use trailing twelve-month or normalized revenue and a multiple that reflects industry, size, growth, and margins.
2. 2 Enter EBITDA and SDE: Use clean earnings measures. Remove unusual income or expenses only when the adjustment can be explained.
3. 3 Set DCF assumptions: Enter year-one free cash flow, forecast growth, discount rate, and terminal growth. Keep terminal growth below the discount rate.
4. 4 Add cash and debt: Include cash, non-operating assets, and interest-bearing debt if you want an equity-value estimate.
5. 5 Compare methods: Review the method-level outputs before using the blended value. A wide spread means assumptions need more work.

For a company with $180,000 EBITDA, test 3.5x, 4.5x, and 5.5x EBITDA while holding other inputs constant. If most realistic scenarios cluster near the same range, your negotiation starting point is more grounded.

Before entering EBITDA or SDE, the Profit Calculator can help reconcile revenue, cost, and margin assumptions used in normalized earnings.

The main benefit is not a single answer. It is a clearer valuation conversation.

• • Separate method visibility: You can see whether revenue, earnings, SDE, or DCF is driving the estimate.
• • Cash and debt clarity: The calculator shows how balance sheet items can move from enterprise value to equity value.
• • Fast scenario testing: Changing multiples, discount rate, or growth assumptions quickly shows the valuation sensitivity.
• • Better advisor discussions: You can bring organized assumptions to brokers, CPAs, attorneys, appraisers, or lenders.
• • Negotiation preparation: A buyer or seller can identify which assumptions need evidence before price discussions become serious.

Use the blended value as a range-building input. If one method is weak for your company, set its multiple or metric to zero and compare the remaining methods. The method count output tells you how many methods were actually included.

A calculator cannot judge customer concentration, owner replacement risk, pending litigation, obsolete inventory, or whether add-backs are acceptable to a buyer. It can, however, keep the math consistent while you investigate those issues.

After estimating a purchase price, the IRR Calculator helps compare that price with projected exit proceeds and holding-period cash flows.

Valuation assumptions should reflect the company, market, and transaction purpose.

• • This calculator does not replace a certified appraisal, fairness opinion, tax valuation, court valuation, or legal advice.
• • Private-company multiples are often based on imperfect transaction data, and DCF outputs are sensitive to discount rate and terminal growth assumptions.
• • The model does not calculate taxes, transaction fees, escrow holdbacks, earn-outs, working capital targets, or purchase agreement adjustments.

For formal uses, valuation work usually weighs asset, income, and market evidence along with company-specific facts. A business valuation calculator can organize assumptions, but if the estimate will affect taxes, estate planning, divorce, shareholder disputes, financing covenants, or investor reporting, involve a qualified valuation professional.

When the methods disagree, do not average blindly. Review the accounting, normalize earnings, compare multiple sources, and document why each assumption fits the company being valued.

According to the IRS S Corporation Valuation Job Aid, no general formula applies to every closely held stock valuation and all relevant financial data and fair-market-value factors must be considered.