World Economy · Free tools

Business valuation calculator

No account, email or phone. Planning estimates, not quotes or personalized advice.

Open full calculator, sources & methodology ↗

Scenario / listing name

Keep up to three named scenarios, then change the calculator for the next one. Saved comparisons stay in this tab and disappear when you leave. To save a file, choose “Save as PDF” in your browser’s print dialog.

Work backward to a price

Required annual surplus after your income goal ($)

Price ceiling under these assumptions: $709,417

Holds every other input fixed, including down-payment percentage, taxes entered as dollar amounts, and income. This is a cash-flow ceiling, not a valuation, approval, or check that you have the upfront cash. Revisit the cash needed after applying it.

1. The listing

Asking price paid to seller ($)Exclude debt you assume separately. For an asset sale, enter the package price.Annual revenue ($)Sales before expenses. Enter 0 if unknown; revenue ratios will be unavailable.Earnings definitionIf the listing only says “profit” or “cash flow,” confirm its definition first.Advertised annual earnings ($)Enter SDE or EBITDA as selected. Negative earnings are allowed.Unsupported add-backs to remove ($)Expenses the seller added back that will still recur for you.Additional annual staffing cost ($)Include a replacement manager if needed. Do not deduct payroll already in earnings.

2. Value assumptions

Industry reference (SDE only)Default 2–3× is an illustrative assumption. Choose an industry or enter your own comparable range.Low earnings multiple (×)Use comparable closed deals, not asking prices.High earnings multiple (×)This sensitivity range is not a statistical valuation interval.Existing debt you assume ($)Only debt that transfers and remains outstanding after closing.Excess cash transferred to you ($)Exclude required operating cash. Not automatically used toward your down payment.Optional net realizable operating assets ($)Equipment, inventory and receivables at resale value, less non-debt liabilities and selling costs. Exclude the cash and debt entered above; 0 skips this cross-check.

3. Financing the purchase

Down payment (%)Planning assumption; not a lender minimum.Acquisition loan annual rate (%)10% example, not a live rate or financing quote.Loan term (years)Fully amortizing loan; 1–30 years.Annual payments on assumed debt ($)Principal plus interest. Include all retained debt and separate seller-note payments, if applicable.Cash-paid closing costs & fees ($)Include lender, legal, accounting and due diligence costs.Extra working capital & reserve cash ($)Your extra cash contribution beyond the price. Not financed by this model.

4. What you need to keep

Annual reinvestment reserve ($)Equipment replacement and ongoing working-capital growth; beyond expenses already in earnings.Your annual income goal ($)Before personal tax. Enter only income not already deducted in earnings or additional staffing.Planning debt coverage target (×)1.25× example. Your lender may calculate this differently.Earnings decline: 20%Stress test: lower adjusted earnings, unchanged debt and reserves.

Estimated price payable to seller$330,000 – $495,000Within your selected range

Based on your 2–3× SDE range, adjusted for assumed debt and acquired excess cash. A range match does not establish a fair deal.

The asking price in context

Try a different purchase price: $450,000

Price / adjusted SDE2.73×

Price / revenue0.50×

Adjusted earnings margin18.3%

Total debt / adjusted earnings2.18×

Price ratios use $450,000: seller price + assumed debt − acquired excess cash. Debt includes the new acquisition loan and assumed debt. SDE leverage is not debt / EBITDA.

Could it support the payments?

New loan payment / month$4,757

Planning debt coverage2.63×

Meets your selected debt coverage target on these assumptions.

Adjusted annual earnings$165,000

Less additional staffing-$0

Less reinvestment reserve-$15,000

Less all annual debt payments-$57,089

Available before your income goal & taxes$92,911

Less your income goal-$60,000

Annual surplus / shortfall before taxes$32,911

Available cash is a planning estimate, not accounting net income. Your income goal is not deducted again if already included elsewhere.

Cash needed & downside

Initial buyer cash needed$135,000

Surplus / initial cash, before taxes24.4%

$90,000 down + $15,000 costs + $30,000 working capital. Acquisition loan: $360,000. The return measure excludes resale value, principal equity buildup, and taxes; SDE can include payment for your labor.

Coverage with earnings down 20%2.05×

Stressed annual surplus after income goal-$89

What needs a closer look

The downside scenario leaves a shortfall. Consider more reserves, less debt, or a lower price.

No replacement labor cost entered. This assumes you can do the seller’s work yourself or it is already covered in expenses.

Zero entries are assumptions, not verified facts. Confirm debt schedules, taxes, owner hours, cash reserves, and the costs of keeping the business running. Results reflect entered numbers, not a review of the listing.