Calculator
How much of the price reaches your account
The headline price and the amount that reaches your account are two different numbers. Between them sit the normalisation of the result, net debt, the working capital adjustment and the part of the price held in escrow or tied to future performance. This calculator lays out that bridge on your own figures.
It does not suggest a multiple. You enter that yourself, because an honest multiple depends on sector, size and risk, and a calculator that guesses one produces a number that looks like a valuation and is not one. If you have no idea what to use, start with the piece on valuation methods or with a conversation.
1. Operating result
Adjustments are costs a new owner will not carry and one-off income they should not count on. Enter the net value of those items.
2. Multiple
3. Bridge to the share price
4. What you get at closing
Normalised EBITDA0
Enterprise value0
Net debt0
Equity value0
Held in escrow and earn-out0
Paid at closing0
The result illustrates a mechanism. It is not a valuation, and it ignores tax, adviser fees and the specific wording of an agreement.
How to read the result
The difference that matters is between the third line and the last. Enterprise value describes the whole business regardless of how it is financed. Equity value is what is owed to you once debt is deducted and cash added. And the amount paid at closing is equity value less whatever is held back against claims and whatever depends on future results.
Owners tend to remember the first number and feel let down by the last. Both are worth watching from the first conversation rather than from the signing.
What goes into EBITDA adjustments
- Owner remuneration above or below a market rate
- Private costs run through the company: cars, travel, insurance
- Rent paid to yourself for property held outside the company
- One-off events: compensation, asset sales, the cost of a dispute
- Income that will not repeat under a new owner
Every one of those has to be documented. An adjustment that cannot be shown on invoices simply disappears in due diligence, and a multiple of its value disappears from the price with it.
Frequently asked
About calculating company value.
What multiple should I enter?
There is no single number. The multiple depends on sector, size, growth, how repeatable the revenue is and how far the business runs without its owner. It is more useful to run the calculation across a few values and watch how the closing amount moves than to hunt for one correct figure.
What will a buyer count as debt?
Not only loans and leases. Often unpaid bonuses, undeclared dividends, tax liabilities, provisions for disputes and supplier balances overdue beyond the usual terms. Worth reviewing before talks begin.
Where does the working capital adjustment come from?
From the difference between working capital at closing and the level agreed as normal. If that conversation has not happened yet, leave it at zero. The mechanism is explained in working capital in a transaction.
Is this a valuation of my company?
No. It is a bridge calculator, a tool that shows how one number becomes another. A valuation requires analysis of the accounts, the contracts and the market, and it produces a reasoned range rather than a single figure.
See also
- What is my company worth, five valuation methods
- EBITDA, enterprise value and equity value in the glossary
- How to sell a company, the whole process
- Escrow and earn-out