Method 1 — Revenue Multiple
Business value = annual revenue × industry multiple. Quick for comparing similar businesses, but ignores profitability.
Multiples are illustrative — adjust to actual market conditions.
Estimated business value (revenue multiple)
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The result above is an educational estimate based on your input, not a professional appraisal and not financial advice. For real transactions, use a certified business appraiser.
Method 2 — SDE Multiple
SDE = net profit + owner's salary + depreciation + interest. Popular for valuing owner-operated small businesses because it adjusts for owner compensation.
Small businesses generally use a 2–3× range; adjust to the market.
Estimated business value (SDE multiple)
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The result above is an educational estimate based on your input, not a professional appraisal and not financial advice. For real transactions, use a certified business appraiser.
Method 3 — Simple DCF
5-year cash flow projection + terminal value, discounted to present value (NPV). Suited to businesses with stable cash flows; sensitive to assumptions.
Must be greater than terminal growth.
Estimated business value (DCF / NPV)
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The result above is an educational estimate based on your input, not a professional appraisal and not financial advice. For real transactions, use a certified business appraiser.
Mode 4 — 3-Method Comparator
Enter the results of the three methods above to see the value range (lowest–highest) plus guidance on when each method is most relevant.
Estimated business value range
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The result above is an educational estimate based on your input, not a professional appraisal and not financial advice. For real transactions, use a certified business appraiser.
When to use each method?
- Revenue multiple — quick comparison between similar businesses; useful when profit data is hard to get. Weakness: ignores profitability and debt.
- SDE multiple — the standard for owner-operated small businesses; adjusts for owner salary and non-cash items. Weakness: multiples depend heavily on the local market.
- Simple DCF — based on cash-flow fundamentals; best for stable businesses that can be projected. Weakness: highly sensitive to the discount rate and growth assumptions.
- Comparator — shows all three at once; a wide range signals that your assumptions need rechecking.
Frequently Asked Questions
What is business valuation?
Business valuation is the process of estimating the economic value of a company or small business based on its financial data, such as revenue, profit, and cash flow. Valuation results are used for many purposes, for example sale negotiations, finding investors, or succession planning. This calculator gives an educational estimate using three common methods — revenue multiple, SDE multiple, and simple DCF — and compares them in a single value range.
How does the revenue multiple method work?
The revenue multiple method multiplies annual revenue by a multiplier (multiple) that is common in its industry. Example: annual revenue of Rp1,000,000,000 times a multiple of 3 gives an estimated value of Rp3,000,000,000. Multiples differ per sector and the preset figures in this calculator are illustrative — adjust to actual market conditions, since the multiple used strongly affects the result.
What is SDE and when is this method used?
SDE (Seller's Discretionary Earnings) is adjusted net profit: profit plus owner salary, depreciation, and interest, since those items are no longer relevant to a new buyer. Example: profit of Rp300,000,000 + owner salary Rp60,000,000 + depreciation Rp25,000,000 + interest Rp15,000,000 = SDE of Rp400,000,000. Multiplied by a 2.5 multiple, the estimated value is Rp1,000,000,000. This method is popular for valuing small and owner-operated businesses.
How is the simple DCF calculated in this calculator?
DCF (discounted cash flow) projects cash flows 5 years ahead and then discounts them to present value. Example: first-year cash flow of Rp100,000,000 growing 10% per year, a 12% discount rate, and 3% terminal growth gives a present value of cash flows of about Rp430,766,873, a terminal value of about Rp1,675,581,111 (present value about Rp950,769,721), for a total NPV of about Rp1,381,536,594. DCF is best suited to businesses with relatively stable, projectable cash flows.
Which method is best for my business?
Revenue multiple is the simplest and suits quick comparisons between similar businesses, but it ignores profitability. SDE multiple suits owner-operated small businesses because it adjusts for owner compensation. DCF suits businesses with stable, projectable cash flows, but is sensitive to discount-rate and growth assumptions. The Comparator mode shows all three at once, with their value range, so you can see the full picture.
Can I use this calculator's result for a buy-sell transaction?
Not directly. This calculator's result is an educational estimate, not a professional appraisal and not financial advice. For real transactions such as business sales, fundraising, or disputes, use a certified professional business appraiser who examines the financial statements, assets, debt, and market conditions thoroughly.