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Business Valuation Calculator

Calculate business value using DCF, comparable multiples, and asset-based methods. Industry-standard WACC, EV/EBITDA, and terminal value analysis.

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Category Finance & Calculations
Industry & Company Profile
DCF Parameters
Method Weights
Total: 100%
Custom Multiples (Optional Override)
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About

Mispricing a business by even 5% on a $10M deal means $500,000 left on the table or overpaid. This calculator implements three independent valuation methodologies: Discounted Cash Flow analysis using a projected FCF stream discounted at the Weighted Average Cost of Capital (WACC), Comparable Company multiples (EV/EBITDA, EV/Revenue, P/E), and Net Asset Value. Each method carries known biases. DCF is sensitive to terminal growth assumptions. Multiples depend on selecting the correct peer group. Asset-based approaches undervalue companies with significant intangible assets. The tool cross-references all three and produces a weighted composite estimate.

Industry multiples are sourced from Damodaran's published datasets for U.S. markets. The DCF model assumes a 5-year explicit forecast period with a perpetuity-based terminal value using the Gordon Growth Model. All discount rates should reflect the firm's actual capital structure. This tool approximates intrinsic value under steady-state assumptions. It does not account for control premiums, illiquidity discounts, or synergy effects in M&A contexts. Pro tip: run the calculation with 3 different WACC values (ยฑ1%) to gauge sensitivity before negotiations.

business valuation DCF calculator EBITDA multiple company valuation enterprise value WACC discounted cash flow business worth

Formulas

The DCF method discounts projected free cash flows to their present value. Each year's cash flow is grown by the expected growth rate g and discounted at the weighted average cost of capital r:

EVDCF = nโˆ‘t=1 FCF0 โ‹… (1 + g)t(1 + r)t + TV(1 + r)n

The terminal value TV uses the Gordon Growth Model, assuming a perpetual terminal growth rate gt:

TV = FCFn โ‹… (1 + gt)r โˆ’ gt

The comparable multiples method calculates enterprise value as:

EVmult = EVEBITDA โ‹… EBITDAcompany

Net Asset Value is computed as:

NAV = Atotal โˆ’ Ltotal

Where FCF0 = current free cash flow, g = projected annual growth rate, r = WACC (discount rate), n = forecast period in years (default 5), gt = terminal growth rate (typically 2โˆ’3%), Atotal = total assets, Ltotal = total liabilities.

Reference Data

IndustryEV/EBITDAEV/RevenueP/E RatioTypical WACC
Technology (Software)18.5ร—6.2ร—28.0ร—9.5%
Healthcare14.2ร—3.8ร—22.0ร—8.5%
Financial Services10.5ร—2.8ร—12.5ร—10.0%
Retail (General)9.8ร—1.2ร—18.0ร—8.0%
Manufacturing8.5ร—1.5ร—15.0ร—9.0%
Real Estate16.0ร—5.5ร—20.0ร—7.0%
Energy (Oil & Gas)6.5ร—1.8ร—10.0ร—10.5%
Telecommunications7.8ร—2.2ร—14.0ร—8.0%
Consumer Goods (Food)11.0ร—1.8ร—19.0ร—7.5%
Construction7.2ร—0.9ร—12.0ร—9.5%
Transportation & Logistics8.0ร—1.1ร—14.5ร—8.5%
Education12.5ร—3.0ร—20.0ร—8.0%
Media & Entertainment11.5ร—2.5ร—21.0ร—9.0%
Professional Services13.0ร—2.0ร—17.5ร—9.0%
Agriculture7.0ร—0.8ร—11.0ร—10.0%
Hospitality & Tourism10.0ร—2.0ร—16.0ร—9.0%
Pharmaceuticals15.0ร—4.5ร—24.0ร—8.5%
Automotive7.5ร—0.7ร—10.5ร—9.5%
E-commerce20.0ร—3.5ร—30.0ร—10.0%
Utilities9.0ร—2.5ร—16.0ร—6.5%

Frequently Asked Questions

The WACC acts as the denominator in each discounted cash flow term. A 1% increase in r typically reduces the total DCF value by 10โˆ’15%, depending on the forecast horizon. The terminal value component is especially sensitive because it compounds over the entire projection period. Always run a sensitivity analysis with at least three WACC scenarios (ยฑ1%) to bound the valuation range.
The Gordon Growth Model formula TV = FCFn รท (r โˆ’ gt) produces a negative or infinite value when gt โ‰ฅ r. Economically, no company can grow faster than the overall economy indefinitely. Standard practice caps gt at 2โˆ’3%, roughly matching long-term GDP growth. This calculator enforces gt < r and alerts the user if this constraint is violated.
The Net Asset Value approach is most relevant for asset-heavy businesses: real estate holding companies, manufacturing firms, natural resource companies, or distressed businesses being valued for liquidation. It systematically undervalues companies where intangible assets (brand, IP, talent, network effects) drive the majority of economic value. For a SaaS company with minimal physical assets, weighting NAV above 10โˆ’15% would produce a misleadingly low estimate.
Industry averages provide a baseline, but individual company multiples can deviate by ยฑ50% or more based on growth trajectory, margin profile, market position, and geographic mix. A high-growth SaaS company in the Technology sector may trade at 25โˆ’30ร— EBITDA versus the sector median of 18.5ร—. Use the custom multiples override in this calculator if you have transaction comparables from recent M&A deals in your sub-sector.
Enterprise Value (EV) represents the total value of the business to all capital providers (debt and equity holders). Equity Value is what remains for shareholders after subtracting net debt: Equity = EV โˆ’ Debt + Cash. This calculator outputs both. When comparing offers, buyers typically negotiate on EV and adjust for the balance sheet at closing.
No. A negative EBITDA multiplied by a positive multiple yields a negative enterprise value, which is economically meaningless. For pre-profit companies, rely on EV/Revenue multiples or the DCF method with a projected path to profitability. This calculator automatically disables the EV/EBITDA and P/E methods when the corresponding input is zero or negative, and redistributes weight to the remaining valid methods.