business calculator
Estimate business value with practical valuation methods.
Save this page to model your business value as your annual revenue, margins, or industry multiples adjust.
Blended valuation
$800,000
Formula
Blended value = (revenue x revenue multiple + profit x profit multiple) / 2This simple valuation model compares revenue-based and profit-based multiples, then blends both estimates.
Step by step
Example
$800,000 revenue at 1.2x and $160,000 profit at 4x produces a blended estimate around $800,000.
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Summary
Blended Valuation
$800,000
Revenue-Based Valuation
$960,000
Earnings-Based Valuation
$640,000
Net Profit Margin
20.00%
D3 visualization
Compare valuation estimates calculated from revenue multiples vs. profit multiples alongside the blended average.
D3 visualization
Overview of annual top-line revenue vs. bottom-line profit.
Guide
Multiple-based valuation is a practical shortcut used in mergers and acquisitions to estimate fair market value by comparing a company against historical industry sales.
Valuations often look at both top-line revenue multiples (often used for high-growth tech or subscription businesses) and bottom-line profit/earnings multiples (standard for mature, cash-generating businesses). Blending both metrics provides a balanced operational range.
Revenue multiple
A multiplier applied to annual sales to value a company before accounting for expenses.
Profit multiple
A multiplier applied to operating profit (EBITDA) to value a company based on earnings.
Multiples vary greatly by size, growth, risk, and industry. Main street businesses typically sell for 2x to 4x seller earnings. High-growth software businesses can fetch 5x to 10x+ of annual recurring revenue (ARR).
A blended valuation averages the revenue-based valuation and the earnings-based valuation to smooth out distortions that occur when profit margins are abnormally high or low.