How to Use the Business Valuation Calculator

The Business Valuation Calculator is a powerful tool designed to help you estimate the value of a business based on its revenue, profits, and industry-specific multipliers. This calculator provides a quick and reliable estimate that can be useful for selling, buying, or attracting investors. Follow these steps to use the calculator:

Step 1: Enter Annual Revenue

• Input the total revenue generated by the business in a year in the “Annual Revenue (₹)” field.
• For example:
  • If the business generates ₹10,00,000 annually, enter 1000000.
  • Ensure the revenue figure reflects the actual income from sales, services, or other sources.

Step 2: Enter Annual Profit

• Input the net profit earned by the business after deducting all expenses in the “Annual Profit (₹)” field.
• For example:
  • If the business earns ₹2,00,000 in profit annually, enter 200000.
  • Net profit is calculated as total revenue minus all operating expenses, taxes, and costs.

Step 3: Enter Industry Multiplier

• Input the industry-specific multiplier in the “Industry Multiplier” field.
• The multiplier reflects the risk, growth potential, and market conditions of the industry. For example:
  • A stable industry might have a multiplier of 2.5.
  • A high-growth industry might have a multiplier of 4.0.
• Research industry benchmarks or consult financial experts to determine the appropriate multiplier.

Step 4: Calculate Business Value

• Click the “Calculate Business Value” button to generate the result.
• The calculator will display two key estimates:
  • Revenue-Based Valuation : Estimated value based on annual revenue.
  • Profit-Based Valuation : Estimated value based on annual profit.

Understanding the Results

• Revenue-Based Valuation : Reflects the business’s value based on its ability to generate revenue.
• Profit-Based Valuation : Reflects the business’s value based on its profitability.
• Example:
  • If the annual revenue is ₹10,00,000, annual profit is ₹2,00,000, and the multiplier is 2.5:
    • Revenue-Based Valuation : ₹25,00,000
    • Profit-Based Valuation : ₹5,00,000