425000 Mortgage Calculator

.val-container { font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; max-width: 800px; margin: 20px auto; padding: 25px; border: 1px solid #e1e1e1; border-radius: 8px; background-color: #ffffff; box-shadow: 0 4px 6px rgba(0,0,0,0.05); } .val-header { text-align: center; margin-bottom: 30px; } .val-header h2 { color: #2c3e50; margin-bottom: 10px; } .val-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 20px; margin-bottom: 25px; } .val-input-group { display: flex; flex-direction: column; } .val-input-group label { font-weight: 600; margin-bottom: 8px; color: #34495e; font-size: 14px; } .val-input-group input, .val-input-group select { padding: 12px; border: 1px solid #ccc; border-radius: 4px; font-size: 16px; } .val-btn { grid-column: span 2; background-color: #27ae60; color: white; padding: 15px; border: none; border-radius: 4px; font-size: 18px; font-weight: bold; cursor: pointer; transition: background 0.3s; } .val-btn:hover { background-color: #219150; } .val-result-box { margin-top: 30px; padding: 20px; background-color: #f8f9fa; border-left: 5px solid #27ae60; display: none; } .val-result-title { font-size: 18px; color: #2c3e50; margin-bottom: 10px; } .val-amount { font-size: 32px; color: #27ae60; font-weight: 800; } .val-metrics { margin-top: 15px; font-size: 14px; color: #7f8c8d; } .val-article { margin-top: 40px; line-height: 1.6; color: #333; } .val-article h3 { color: #2c3e50; margin-top: 25px; } .val-article table { width: 100%; border-collapse: collapse; margin: 20px 0; } .val-article th, .val-article td { border: 1px solid #ddd; padding: 12px; text-align: left; } .val-article th { background-color: #f2f2f2; } @media (max-width: 600px) { .val-grid { grid-template-columns: 1fr; } .val-btn { grid-column: span 1; } }

Business Valuation Calculator

Estimate the fair market value of your business based on earnings and industry multiples.

1.5x – High Risk / Micro 2.0x – Main Street Service 2.5x – Standard Small Business 3.0x – Established/Growing 4.0x – High Margin / Tech 5.0x+ – Scalable Enterprise
Estimated Business Valuation
$0.00

How Is a Business Valued?

Valuing a small to medium-sized business typically relies on a method known as the Seller's Discretionary Earnings (SDE) method. This calculator uses the SDE approach, which is the standard for businesses with values under $5 million.

Understanding the Formula

Our calculator performs the following steps to reach your valuation:

  1. Calculate EBITDA: Annual Revenue minus Operating Expenses.
  2. Calculate SDE: EBITDA plus Owner's Salary and Benefits. This represents the total financial benefit available to a single owner-operator.
  3. Apply Multiple: The SDE is multiplied by an industry-specific factor (the Multiple).
  4. Add Assets: Finally, the value of saleable inventory and tangible equipment is added to the total.

Common Industry Multiples

Industry Type Average Multiple
Retail & Mom-and-Pop Shops 1.5x – 2.5x
Professional Services (Accounting, Law) 2.0x – 3.5x
Manufacturing 3.0x – 4.5x
SaaS & Technology 4.0x – 7.0x

Valuation Example

Imagine a local landscaping company with $500,000 in revenue and $350,000 in expenses. The owner takes an $80,000 salary. The "Profit" shown on tax returns might only be $70,000, but the SDE is $150,000 ($70k profit + $80k salary).

If the industry multiple is 2.5x, the business is worth $375,000 (SDE × 2.5). If they also have $50,000 worth of trucks and equipment, the total valuation becomes $425,000.

Factors That Increase Your Multiple

  • Recurring Revenue: Subscription-based models always command higher multiples than one-off sales.
  • Clean Financials: Verifiable tax returns and P&L statements reduce risk for buyers.
  • Low Owner Dependency: If the business runs without the owner's daily involvement, it is much more valuable.
  • Market Growth: Being in a trending industry increases the "blue sky" potential.
function calculateValuation() { var revenue = parseFloat(document.getElementById("annualRevenue").value); var expenses = parseFloat(document.getElementById("annualExpenses").value); var salary = parseFloat(document.getElementById("ownerSalary").value); var multiple = parseFloat(document.getElementById("industryMultiple").value); var assets = parseFloat(document.getElementById("netAssets").value); if (isNaN(revenue) || isNaN(expenses) || isNaN(salary) || isNaN(assets)) { alert("Please enter valid numerical values."); return; } // Calculate EBITDA var ebitda = revenue – expenses; // Calculate SDE (Seller's Discretionary Earnings) // Note: Often salary is already part of expenses, so we add it back var sde = ebitda + salary; // Basic valuation formula var baseValue = sde * multiple; var totalValue = baseValue + assets; // Ensure we don't show negative valuations if (totalValue < 0) totalValue = 0; // Format currency var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); // Display results document.getElementById("valResult").style.display = "block"; document.getElementById("valuationDisplay").innerText = formatter.format(totalValue); document.getElementById("metricDisplay").innerHTML = "SDE: " + formatter.format(sde) + " (Earnings + Compensation)" + "Multiplier Applied: " + multiple + "x" + "Asset Value Added: " + formatter.format(assets); // Smooth scroll to result document.getElementById("valResult").scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

Leave a Reply

Your email address will not be published. Required fields are marked *