Valuation
Calculator
Take
advantage of our free online valuation calculator
to determine a ballpark valuation of your business.
INSTRUCTIONS:
To use the the calculator, click on "Operations
Cash Flow Calculator" below and enter your
expected profits for the next four years, your
cost of capital and your expected growth rate
(for explanations, please see the definitions
below). The calculator will then determine how
much your company would be worth. Not all information
is required, but you should enter as much information
as you have. SEE DEFINITIONS BELOW FOR FURTHER
EXPLANATIONS
PLEASE
NOTE:The valuation methodology employed by this
calculator (called NPV) is only one of several
that should be used in determining a value of
a business.
WE REALIZE THAT THIS IS A BIT COMPLEX AND ARE
HAPPY TO ASSIST YOU AS NEEDED WITHOUT OBLIGATION.
FEEL FREE TO CALL US (1-866-712-3948)
IF YOU HAVE ANY QUESTIONS OR NEED
HELP IN FINDING THE INFORMATION YOU WILL NEED
TO ENTER.
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US WITH QUESTIONS
Definitions
Expected annual growth
This is the rate you expect your business to
grow after the first four years. Usually, it
is an average of growth you have been experiencing.
For example, if your revenues have increased
by 10% every year over the past few years, you
might enter 10%.
Weighted average cost of capital (WACC)
This is the cost of capital, or the interest
rate, investors would require to put money into
your business. Unless you are a fortune 500
company with an excellent credit rating, this
rate should be at least 12% to 25%. 25% is good
number to use. For small businesses that are
not very consistent, this rate can be much higher.
NPV Value of your business
This is the value of all of your estimated future
profits discounted in today's dollars at your
Weighted Average Cost of Capital (WACC).
Operating profit
This is your total profit before interest and
taxes. This is often called Earnings Before
Interest and Taxes or EBIT.
Interest expense
Total interest expense for the year.
Interest income
Total interest income for the year.
Income taxes
Total income taxes paid for the year.
Depreciation and amortization
If you had any depreciation on equipment or
land enter those amounts here. They are added
back into your cash flow.
Change in accounts payable
If you had a net change in your accounts payable,
enter the change here. If you have an increase
in accounts payable, your cash flow goes up.
If you have had a decrease in your accounts
payable, your cash flow is reduced.
Change in inventory
If you had a net change in your inventory, enter
that amount here. If you are holding more inventory
your cash flow is decreased.
Change in accounts receivable
If you had net change in your accounts receivable,
enter that amount here. Reducing your accounts
receivable by collecting money owed more quickly
can increase your cash flow and your valuation.
Changes in operating assets & liabilities
Enter any net change in operating assets and
liabilities.
Other net change
Enter any other net change that impacted your
cash flow for the period.
Capital expenditures
This is the amount you spent on capital equipment
and land that you were not able to expense for
the period. If you were able to expense the
expenditure it is already accounted for in your
EBIT.
Additional investment income
Enter any other investment that increased or
(decreased) your cash flow for the period.
Information and interactive calculators are
made available to you as self-help tools for
your independent use and are not intended to
provide investment advice. We can not and do
not guarantee their applicability or accuracy
in regards to your individual circumstances.
All examples are hypothetical and are for illustrative
purposes. We encourage you to seek personalized
advice from qualified professionals regarding
all personal finance issues.
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