Estimate a UK business value using an EBITDA multiple and compare it with net asset value.
Planning estimate only. A professional valuation may adjust earnings, working capital, debt, cash, tax, owner dependence, marketability and deal terms.
How to use the Business Valuation Calculator
Enter maintainable EBITDA, an appropriate valuation multiple, surplus cash and interest-bearing debt. Add adjusted assets and liabilities to see a separate net asset value comparison. Use normalised figures rather than a single unusual trading year.
How the business valuation is calculated
| Result | Calculation |
|---|---|
| Enterprise value | Maintainable EBITDA × valuation multiple |
| Estimated equity value | Enterprise value + surplus cash − interest-bearing debt |
| Net asset value | Adjusted total assets − adjusted total liabilities |
Choosing maintainable EBITDA
Maintainable EBITDA aims to represent repeatable trading performance. Review one-off income and expenses, owner remuneration, related-party charges, exceptional costs and recent changes that a buyer would reasonably normalise. Overstating maintainable earnings can materially overstate the result.
Choosing a valuation multiple
The multiple can vary with sector, scale, growth, customer concentration, recurring revenue, management depth, margins and risk. Comparable transactions may help, but the terms and financial definitions must be genuinely comparable. Test a sensible range instead of treating one multiple as certain.
Enterprise value and equity value
Enterprise value represents the operating business before cash and debt adjustments. Equity value is the amount attributable to owners after the entered surplus cash is added and debt is deducted. Actual transactions can also include working-capital adjustments and other negotiated items.
Asset-based comparison
Net asset value can be informative for asset-heavy businesses or as a cross-check. Book values may differ from current market values, and internally generated goodwill may not appear on the balance sheet. The earnings and asset methods answer different questions, so they need not produce the same figure.
Official valuation guidance
HMRC maintains guidance and manuals for shares and asset valuations. Review the official shares and assets valuation guidance when a valuation is needed for tax, and obtain qualified advice for a transaction or formal filing.
Related calculators
Check trading performance with the Profit Margin Calculator. Model qualifying innovation relief with the R&D Tax Credit Calculator UK and estimate the sales level needed to cover costs with the Break-Even Calculator. Browse all tools on the United Kingdom Calculator homepage.
Frequently asked questions
What is a business valuation multiple?
It is a factor applied to a financial measure such as maintainable EBITDA to estimate enterprise value.
What is the difference between enterprise value and equity value?
Enterprise value reflects the operating business. Equity value adjusts it for the entered surplus cash and debt.
Should I use profit or EBITDA?
This calculator uses maintainable EBITDA. Other valuation methods may use EBIT, profit after tax, revenue, cash flow or assets.
Why does net asset value differ from the earnings valuation?
Net asset value measures adjusted assets less liabilities, while the earnings method reflects expected maintainable trading performance and the selected multiple.
Can I use this estimate for tax or a sale agreement?
Not by itself. Formal tax, legal and transaction decisions may require a valuation prepared by an appropriately qualified professional.