business valuation
Business Valuation Calculator: A Simple EBITDA-Multiple Estimate
A common case: a founder hears at a networking event that “companies like ours go for 10x.” Ten times what, though? Revenue, EBITDA or profit after tax are very different numbers, and that confusion is where most valuation conversations go wrong.
This is a first-pass EBITDA-multiple model. Illustration: revenue ₹10 crore at a 15% EBITDA margin gives EBITDA of ₹1.5 crore. At an assumed 8x multiple, enterprise value is ₹12 crore. Subtract net debt of ₹3 crore and the equity value, what the owners’ shares are worth, is ₹9 crore. The multiple here is an assumption, not a market benchmark.
Founders paying themselves through the business can check the freelancer tax calculator and plan sale proceeds with the lumpsum calculator.
Illustrative equity value
₹65.0 L
Educational estimate only. Verify assumptions, source data and professional advice before investing, valuing a business or filing tax.
The mistake I see most
Treating enterprise value as the cheque you’ll receive. Debt, working-capital adjustments and any cash you’re expected to leave in the business all come out before equity holders are paid. In my illustration that gap is ₹3 crore, a quarter of the headline number.
Frequently asked questions
What is an EBITDA multiple?
It is a market-based multiple applied to EBITDA to estimate enterprise value. The right multiple varies by sector, growth, risk and transaction evidence.
Can this be used for fundraising or a sale?
Use it as a discussion starting point only. Obtain a qualified valuation, financial diligence and legal advice before a transaction.
Related calculators & guides
Explore all Findost calculators.