Business Valuations

Business Valuation Tools Instructions

STEP 1

Sales: Enter in the top line revenues of the company for the applicable year. For the most current year, enter in your best estimate of the financial performance for year end.

Cost of Goods Sold (COGS): Enter in your cost of goods sold.

Operating Expenses: Enter in total operating expenses.

Net: Calculated by taking the Sales minus COGS minus Operating Expenses. Check to see if the calculated net matches the net income of your financial statements.

Add Backs: You can only add back expenses that are in your financial statements. If your salary is $50k and it’s a line item on your expenses, you can only add back $50k.

STEP 2

Industry: Pick the primary industry you’re in. If you are in multiple industries, you might need to break up the income and expenses and run this calculation multiple times to get a better estimate of value. You should also consider adding a size premium as well to the sum of values. This tool might not appropriate for some broad-based businesses.

Manager's Salary: Enter in the amount required for a manager to operate the business.

Earnings Trend: The selection should reflect your belief of what the trend will look like moving forward. It’s difficult to continue to grow by 20% or more per year over a long period of time.

Risk factors:

Upside/Low Risk Factors

PURPOSE

You can use this to track why you did the valuation and it’s good for us to get a better idea of what people are using our tool for so we can get better.

Regardless of the reason, this business valuation calculator is an estimate of value and meant for information purposes only. It should not be used for any purposes that require a certified business valuation or analyst or any kind of legal dispute.


Back to the Business Valuation Tool.