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Business Valuation Tools Instructions

Step 1 Definitions

Sales
The top line revenues of the company for the applicable year. For the most current year, enter in your best estimate of the financial performance for year-end without accounting for a high level of growth, since growth is a function of the Q&A on the calculator.

Cost of Goods Sold (COGS) & Operating Expenses
Enter in your cost of goods sold on an accrual basis. If you operate on a cash basis, the COGS will be the SDE plus the difference between the Beginning Inventory at the beginning of the applicable period and the Ending Inventory at the end of the applicable period. This is an adjustment that we can help you with in more detail as we prepare for market. Enter all COGS and Operating Expenses of the company, leaving nothing out. Add Backs will be taken into account later in the calculator.

Net Income
Calculated by taking the Sales minus COGS minus Operating Expenses. Check to see if the calculated net matches the net income of your financial statements.

Add Backs
You can only add back expenses that are actually on your Income Statement – you should not add back items from your Balance Sheet, Cash Flow Statement or any other financial statements.

 

STEP 2 Definitions

Business Model
Pick the primary business model you operate in – even if it’s not exact – just pick the one that is closest to your model.

Number of Employees
Enter in the number of Contractors, Virtual Assistants and Employees you have working for your company, including all owners.

Company Offices
Identify whether you own or lease your office space, or alternatively, whether you and your staff work from home.

Growth Analysis
When looking at the prior year and current year, how are your sales growing? Are they up, down or level?

Risk Profile
Pick all of the risk factors that you feel are pertinent to your business – the valuation range we arrive at his highly influenced by these factors, so to the extent you don’t identify the appropriate risk factors, it can dramatically change the true value range the calculator identifies for your business.

Value Propositions
Pick all of the value propositions that are relevant to your particular business. Chances are that this doesn’t properly reflect ALL of your company’s Value Propositions, but these are high level influencing propositions. To the extent you don’t identify the appropriate Value Propositions, it can dramatically change the true value range the calculator identifies for your business.

 

IMPORTANT NOTE

You can use this calculator to give you a very basic understanding of the potential value range of your business. Because every company is different, and an online calculator could never ask ALL of the questions that might influence your particular business’s Enterprise Value, this calculator should only be used as a basic guideline. This calculator is meant for informational purposes only. It should not be used for any purposes that require a certified business valuation or for any kind of a legal dispute.

To get an actual valuation on your business, please CONTACT US to speak directly with a Business Broker with specific experience in your particular vertical and deal size.

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