Business valuation calculator: revenue and EBITDA multiples

How it works

Value = revenue × revenue multiple, or EBITDA × EBITDA multiple. Enter a low and high multiple to get a range rather than a single number, because real valuations depend on growth, margins, market and negotiation.

Example: a company with ₹10 crore of revenue and ₹2 crore of EBITDA, at 3–6x revenue, is valued at ₹30–60 crore; at 8–12x EBITDA, at ₹16–24 crore. The gap between the two is typical: revenue multiples reward growth, EBITDA multiples reward profit.

Choosing multiples

Multiples vary widely by sector, growth rate and market conditions. Fast-growing software companies with high gross margins can command high revenue multiples; slower or lower-margin businesses, such as services or retail, sell for much less. The defaults here are illustrative only. Look at recent deals and listed peers in your sector, and remember that private, smaller companies usually sell at a discount to larger listed ones.

Other valuation methods

• Discounted cash flow (DCF): values future cash flows; see our DCF calculator.
• Comparable transactions: what similar companies sold for.
• For early startups, the price set in a funding round: see pre-money and post-money valuation.

What moves the multiple

• Growth: faster-growing companies earn higher multiples, because today's revenue is a small share of future revenue.
• Gross margin: a business keeping 80% of each rupee of revenue is worth more per rupee than one keeping 20%.
• Recurring revenue and retention: predictable subscription income is valued above one-off sales.
• Concentration and risk: dependence on a few customers, founders or one channel lowers the multiple.
• Market conditions: multiples for the same kind of company can halve or double between years.