Basic Business Valuation
Basic Business Valuation Calculator Explained:
(a) What is this? This calculator gives you a basic way to get a value for your business.
(b) What doess this tell me? A valuation of your business using this method.
(c) Why should I use it? Once you establish the Earnings Before Proprietors drawing, Interest, Tax and Depreciation (EBPITD), this makes for a quick and easy way to value your business. Don't assume your business is worth this as few buyers will pay 1 Year's EBPITD unless the business has extraordinary goodwill (that can be transferred), or there are good long term contracts in place.
(d) Caution: A business, is like anything, it all depends what someone wants to pay for it. Do not assume that this valuation will be what you will achieve at the time of sale of your business. Any decisions you make, or don't make should be with the assistance and advice of your accountant or trusted financial advisor. You use this calculator at your risk.