Estimate business value using multiple methods: DCF, comparable multiples, asset-based, and rule of thumb with weighted average.
This tool estimates what a business is worth by running four methods - discounted cash flow, comparable multiples, asset-based, and a rule of thumb - and combining them into one weighted average. You enter the financials and the assumptions; the tool does the arithmetic. The result is an estimate, not a price, and the answer moves whenever your growth rate, discount rate, or multiple moves. Most people misread the weighted figure as an appraisal. What surprises them is how far apart the four methods land - that spread is the most useful output the tool gives, because it shows how much of the value comes from assumptions rather than from the business itself.
Discounted cash flow projects future earnings and discounts them at your chosen discount rate - the higher the rate, the lower the value. The multiples method applies a market multiple, such as 4 times EBITDA, to current earnings. Asset-based adds up net assets. The rule of thumb applies an industry shortcut, often a percentage of revenue or a multiple of seller's discretionary earnings. Each reads different evidence, so the four disagree.
Earnings-based methods usually carry the most weight, since buyers ultimately pay for earnings. But every input is an assumption: nudging the discount rate or growth rate by a point or two can swing the final number by double digits. The gap between the highest and lowest method values shows how much of the answer is driven by your assumptions.
Because each one reads different evidence. DCF values expected future cash, multiples read what similar businesses have sold for, asset-based values what the business owns, and the rule of thumb is an industry shortcut. Wide disagreement is normal - it is why the tool averages the methods. Treat the spread as information: the wider it is, the more your assumptions are doing the work.
Not on its own. Banks, courts, and tax agencies expect a professional appraisal backed by documented assumptions, market comparisons, and a signed report. Use this tool to set expectations, test an asking price, or prepare the numbers a professional appraiser will need - not as the final figure in a transaction.
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