Determine The Value Of A Business Using Our Business Valuation Calculator

What is the value of my business?

Similar to bond or real estate valuations, the value of a business can be expressed as the present value of expected future earnings. Use this calculator to determine the value of your business today based on discounted future cash flows with consideration to "excess compensation" paid to owners, level of risk, and possible adjustments for small size or lack of marketability.

InputPart 1

Annual earnings before interest, taxes, depreciation, and amortization¹ ($)

"Excess compensation"² paid to owners (if no excess, enter 0) ($)

Anticipated rate of earnings/compensation growth (0 if level) (0% to 100%)

Number of years earnings are expected to continue
(maximum 10 which assumes perpetuity) (0 to 10)

Discount factor based on level of business/industry/financial risk³

Discount for lack of marketability⁴ (0% to 100%)

¹ Use an average of the last three years to avoid valuations that are too high or too low based on one really good or one really bad year.

² "Excess compensation" is the difference between total compensation paid to the owners and total compensation that would be paid for the same job(s) if those individuals were not owner(s) of the business (when total compensation paid to the owner(s) is greater). Use an average of the last three years.

³ The analysis uses the input item “level of business/industry financial risk” to determine a discount factor in the calculation. For example, for a business in a new industry, it may reflect a higher risk of failure. Alternatively, it could reflect a lower risk of failure for businesses in a stable mature industry. Certain industries may have higher levels of risk than others.

Level of risk	No risk	Low	Average	Considerable	High
Discount factor used	3%	6.5%	10%	13.5%	17%

⁴ A discount for lack of marketability may be appropriate for businesses that are difficult to sell such as some small private businesses, a business with environmental problems or hazards, etc.

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.