Valuation multiple calculator
What enterprise value and equity residual follow from your selected annual metric and multiple?
A teaching example in the units shown below.
These authored example inputs illustrate the calculation. Replace them with your own documented amounts, periods and rates; they are not measured industry averages or available offers.
Use an enterprise multiple for the same metric and business scope. No price-to-earnings multiple is used.
A positive metric is required for the illustrative multiple calculation.
Your selected positive multiple. The tool supplies no observed or recommended market multiple.
Debt to subtract in this simplified enterprise-to-equity bridge.
Cash outside the operating assets represented by enterprise value.
Your entered scenario
Starting exampleCalculation updated using the entered assumptions.
Formula and interpretation
Illustrative enterprise value = positive annual metric × selected enterprise multiple
Net debt = debt − excess cash
Illustrative equity residual = enterprise value − net debt
To reproduce the worked example, choose Hypothetical arithmetic example under Starting example. Business presets have their own inputs; compare the selected values before applying the result.
Match revenue, EBITDA or EBIT to the same enterprise-multiple definition. A price-to-earnings multiple has a different numerator.
A negative equity residual remains visible. It does not establish a negative share price or personal liability.
Worked example: an assumed three-times multiple on $100,000 annual EBITDA gives $300,000 enterprise value. Subtract $50,000 debt and add $20,000 excess cash for a $270,000 illustrative equity residual. At two times the same metric, that residual is $170,000.
Before applying this method to Barbershop or another published case, check whether the chosen annual metric reflects paid owner or replacement labor and a feasible workload. The tool supplies neither comparable transactions nor an appropriate sale multiple.
Definitions and sources
These references support definitions and calculation boundaries, not the selected amounts. Worked examples below use the hypothetical arithmetic inputs. A selected business preset has its own roster, cost allocation and evidence; its results can differ without a formula error.
- Enterprise and equity valuation definitions — Aswath Damodaran, NYU Stern. Page 16 supports matching enterprise-value multiples and the debt/cash distinction; no market multiple is copied. Accessed October 4, 2026.
Continue with a related calculation
Connect the calculation to a complete operating plan
Review startup uses, staffing, annual results and input evidence alongside the relevant worksheets. A single calculation does not replace local quotes or a dated cash schedule.
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