Estimate what a business is worth three ways before you make an acquisition offer. No single method tells you what a business is worth. The DealWorthIQ business valuation calculator estimates value with a five-year discounted cash flow, a revenue multiple, and an EBITDA multiple, adjusts for market risk, management quality, and competitive position, and blends the three into one estimate.
Formulas behind the Business Valuation Calculator
Projected free cash flow: EBITDA grown each year by your growth rate × 75%. The calculator assumes a 25% tax rate and that capital spending roughly offsets depreciation.
Terminal value: Year-5 cash flow × (1 + terminal growth) ÷ (discount rate − terminal growth). The Gordon growth model: the value of all cash flows after year 5.
DCF value: Present value of years 1–5 cash flows + present value of the terminal value. Each future amount is discounted back to today at your risk-adjusted discount rate.
Multiple-based values: Revenue × revenue multiple, and EBITDA × EBITDA multiple. Both multiples are adjusted up or down for risk.
Weighted value: 40% DCF + 30% revenue-multiple value + 30% EBITDA-multiple value. Blending the methods keeps one optimistic assumption from driving the whole estimate.
Frequently asked questions
How do you value a small business?
Common approaches are a discounted cash flow model and market multiples of revenue or EBITDA. Using more than one method and comparing the results gives a more reliable range than any single number.
What EBITDA multiple should I use?
Multiples vary by industry, size, and risk. Smaller businesses often sell for lower multiples than large ones. The calculator shows an industry benchmark next to your result so you can check your assumption.
How do risk factors change the valuation?
Higher market risk, weaker management, or a weaker competitive position raise the discount rate and lower the multiples, which reduces the value. Lower risk does the opposite.