Earnings Multiple Valuation Calculator
This multi-method valuation calculator estimates company value using earnings multiples: P/E (equity multiple), EV/EBITDA, and revenue multiples. It supports normalized income inputs, adjustments for net debt, cash, minority interests, control premiums, and per-share results to assist transaction modelling and sanity checks.
Use this tool as a rapid approximation and calibration aid. It is not a substitute for a full valuation report prepared by a qualified appraiser or financial advisor that includes due diligence, forecast modelling, and careful reconciliation of accounting adjustments.
Estimates equity value directly by applying a P/E multiple to normalized earnings, then applies control premium and minority discount adjustments and divides by shares outstanding for per-share value.
Inputs
Results
Estimated Equity Value
$1,200,000.00
Estimated Price per Share
$120.00
| Output | Value | Unit |
|---|---|---|
| Estimated Equity Value | $1,200,000.00 | USD |
| Estimated Price per Share | $120.00 | USD |
Visualization
Methodology
The calculator applies widely used market multiple techniques: multiply an earnings metric by an appropriate multiple, then reconcile enterprise-to-equity values by adding cash and subtracting net debt and minority interests. P/E is applied directly to equity earnings, while EV multiples are applied to enterprise metrics and converted to equity value.
Inputs should be normalized (one-off items removed, owner compensation adjusted, non-operating gains/losses excluded). Choose industry averages only after confirming comparability in business model, growth, margin profile, capital intensity, and size.
Worked examples
If normalized earnings are 200,000 and selected P/E is 8, estimated equity value = 200,000 × 8 = 1,600,000. With 100,000 shares outstanding, price per share = 16.00.
If normalized EBITDA is 300,000 and EV/EBITDA median is 6, enterprise value = 1,800,000. If net debt = 200,000 and cash = 50,000, equity value = 1,800,000 − 200,000 + 50,000 = 1,650,000.
Key takeaways
This tool provides scenario-based, multi-method valuation estimates. It is intended for quick analysis, calibration, and sensitivity exploration; it is not a substitute for formal valuation engagement.
For regulated, audited, or transaction-grade valuations, work with licensed professionals and retain source documentation, follow applicable accounting rules, and perform sensitivity and scenario analysis.
Further resources
External guidance
Expert Q&A
How should I choose the multiple?
Select a multiple from comparable public companies or recent transactions that match size, growth, margin, and business model. Industry averages are a starting point; adjust using company-specific risk, growth outlook, and profitability. For regulatory or audit work, document sources and justification for the chosen multiple.
What are common adjustments to earnings before applying a multiple?
Remove non-recurring gains/losses, normalize owner compensation, adjust for related-party transactions, and restate accounting treatments where comparables use different policies. Use consistent recurring metrics for comparability.
Can this calculator be used for audited or regulatory valuations?
This tool produces indicative results. For audited or regulatory valuations, retain a licensed valuation professional. Ensure work follows applicable standards (e.g., IFRS/US GAAP for financials) and document methodology, assumptions, and sensitivity analyses.
How accurate are these estimates?
Accuracy depends on input quality and choice of multiples. These methods are sensitive to normalization choices and multiples. Use sensitivity testing and scenario analysis; disclose uncertainty and the range of plausible values.
How should I handle control premiums and minority discounts?
Control premiums and minority discounts reflect market practice and transaction evidence. Apply them as percentages to reflect the difference between controlling interest and a minority stake. Document market sources and rationale.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov/
- International Organization for Standardization (ISO) — https://www.iso.org/
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org/
- U.S. Occupational Safety and Health Administration (OSHA) — https://www.osha.gov/
- U.S. Securities and Exchange Commission (SEC) - Filings and Standards — https://www.sec.gov/