Business Valuation Calculator

Finance

Estimate what a business is worth using the EBITDA multiple method. Enter EBITDA, a valuation multiple, plus debt and cash to get the enterprise value and the equity value.

Formula

Enterprise Value = EBITDA × Multiple; Equity Value = Enterprise Value − Debt + Cash
  • EBITDA (earnings before interest, tax, depreciation and amortisation) is a common proxy for operating cash flow.
  • Enterprise value = EBITDA × a valuation multiple typical for the industry and company size.
  • Equity value = enterprise value − debt + cash, i.e. what shareholders' stake is worth.
  • Multiples vary widely by sector, growth, and risk — small private firms often trade at 3–6×, larger ones higher.
  • This is a quick estimate; a full valuation also considers DCF, comparable transactions, and assets.

EBITDA 250k at 6×, debt 300k, cash 100k

Inputs
  • EBITDA: 250000
  • Valuation Multiple: 6
  • Debt: 300000
  • Cash: 100000

Enterprise value = 250,000 × 6 = 1,500,000. Equity value = 1,500,000 − 300,000 + 100,000 = 1,300,000.

Frequently asked questions

What is the EBITDA multiple method?
It values a business by multiplying its EBITDA by a market multiple that reflects its industry, size, and growth prospects.
What's the difference between enterprise value and equity value?
Enterprise value is the whole business; equity value subtracts debt and adds cash to show what owners' shares are worth.
What multiple should I use?
It depends on the sector and company. Small private firms often sit around 3–6× EBITDA, but research comparable deals for a realistic figure.
Why add cash and subtract debt?
A buyer effectively takes on the company's debt and gains its cash, so these adjust the headline enterprise value to equity value.
Is this an exact valuation?
No. It's a fast estimate. A formal valuation combines several methods and professional judgement.