Revenue Multiple Valuation Calculator
This calculator estimates enterprise and equity value using revenue multiples across multiple workflows: direct application of a chosen multiple, derivation of a multiple from a comparable company, and an ARR-adjusted approach for subscription/SaaS businesses.
Use the appropriate revenue measure (TTM, LTM, ARR, or run-rate) and ensure comparable inputs match the same period and accounting basis. Results are estimates intended for screening and scenario analysis, not formal valuation opinions.
Apply a user-specified revenue multiple to the chosen revenue measure to estimate enterprise value and reconcile to equity value.
Inputs
Results
Enterprise value (EV)
$3,000,000.00
Implied equity value
$3,000,000.00
EV / Revenue (implied)
3
| Output | Value | Unit |
|---|---|---|
| Enterprise value (EV) | $3,000,000.00 | — |
| Implied equity value | $3,000,000.00 | — |
| EV / Revenue (implied) | 3 | — |
Visualization
Methodology
The primary method multiplies the selected company revenue by a revenue multiple to estimate enterprise value (EV = Revenue × Multiple). Equity value is reconciled by subtracting net debt and adding cash.
When deriving a multiple from a comparable, this tool computes the comparable's EV / Revenue and applies that ratio to the subject company. For subscription/ARR businesses the tool can adjust a base multiple by a growth-based premium to reflect recurring revenue dynamics.
This tool follows best practices for data integrity and traceability. For operational controls and data handling, consider guidance from NIST and quality management principles from ISO when preparing inputs. Software accuracy and testing approaches should align with recognized engineering standards.
Key takeaways
Use this tool to produce quick, reproducible EV and equity estimates using revenue multiples across three workflows: apply a chosen multiple, derive a multiple from comparables, or apply an ARR-adjusted multiple for SaaS.
Always document inputs, check comparability of revenue definitions, run sensitivity tests, and treat outputs as indicative. For formal valuations, engage a qualified valuation professional.
Further resources
Expert Q&A
Which revenue measure should I use?
Choose the measure that best reflects the company's recurring economics and the multiple source. Use ARR or run-rate for subscription businesses, and TTM/LTM for historically reported revenues. Ensure comparables use the same period and accounting basis.
How should I calibrate the multiple?
Calibrate using recent, industry-specific comparables adjusted for size, growth, profitability, and one-time items. Review a range of multiples and run sensitivity scenarios rather than relying on a single figure.
Are results suitable for financial reporting or regulatory filings?
No. Outputs are indicative models for screening and internal analysis. For financial reporting, transaction negotiation, or regulatory purposes obtain a formal valuation by a qualified professional and follow applicable accounting and regulatory standards.
What are the main accuracy risks?
Key risks include mismatched revenue definitions, stale or non-comparable transaction data, incorrect net debt accounting, and ignoring company-specific adjustments (nonrecurring items, seasonality). Document assumptions and validate inputs against source documents.
Does the tool account for taxes, minority interest, or other adjustments?
No. This calculator provides a streamlined EV and equity reconciliation. Adjust for taxes, minority interests, working capital, or other post-valuation items outside the model as required by your analysis.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- IEEE - Institute of Electrical and Electronics Engineers — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov