Business Valuation Calculator
Please note: this is a test version of a simplified valuation tool currently open to the public. This only provides indicative values based on the explanations below and simple inputs. Should you require a report or comprehensive valuation, please contact us.
How the Business Valuation is Calculated
This business valuation calculator uses three different methods to estimate the value of your business:
- Net Revenue Valuation: This method multiplies your business’s net profit (calculated from revenue and profit margin) by an industry-specific multiplier to estimate its market value. This is suitable for businesses where profitability is the key driver of value.
- Net Asset Value (NAV): NAV is calculated as the difference between your total assets and total liabilities, giving you the book value of the business. This method is more appropriate for asset-heavy businesses or in liquidation scenarios.
- Discounted Cash Flow (DCF) with Terminal Value: The DCF method calculates the present value of your business’s future cash flows over a fixed period of 5 years. The cash flow for each of these years is grown using a short-term growth rate. After Year 5, a Terminal Value is calculated based on the cash flow in the 5th year, using a long-term growth rate. This terminal value represents the value of cash flows beyond Year 5, assuming the business continues indefinitely. Both the 5-year cash flows and the terminal value are discounted back to present value using the discount rate.
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