Accounting Business Valuation Calculator FAQ
Answers to common questions about valuing an accounting business with normalized EBITDA, multiples and net debt.
This FAQ explains the calculator inputs, the difference between enterprise and equity value, and the assumptions behind an EBITDA multiple valuation estimate.
General valuation questions
Core concepts used by the calculator.
What does this calculator estimate?
It estimates a low, high and midpoint enterprise value and equity value range for an accounting business.
Is the result a guaranteed sale price?
No. It is an educational estimate based on the inputs and cannot account for every deal factor.
What is normalized EBITDA?
It is EBITDA adjusted to better represent recurring operating earnings.
Inputs and calculation
How figures enter the calculation.
What is an EBITDA multiple?
It is a factor applied to normalized EBITDA to estimate enterprise value.
How is net debt calculated?
Net debt is generally interest-bearing debt less surplus cash.
Can net debt be negative?
Yes. Negative net debt means net cash, which increases estimated equity value.
How is EBITDA margin calculated?
Normalized EBITDA divided by annual revenue, multiplied by 100.
Enterprise value and equity value
How the calculator bridges operating value to shareholder value.
What is enterprise value?
It is the estimated value of the operating business before financing effects.
What is equity value?
It is enterprise value less net debt, representing estimated value attributable to shareholders.
Why can equity value be lower than enterprise value?
Positive net debt is deducted from enterprise value.
Accuracy and scope
Factors not included in a simple multiple calculation.
Does the calculator include working-capital adjustments?
No. Working capital is excluded from this estimate.
Does it include sale costs or taxes?
No. Taxes, legal fees, advisory fees and other transaction costs are excluded.
What can change the final valuation?
Client retention, revenue quality, concentration, staffing, growth, buyer demand, due diligence and transaction terms can all affect value.
What is the difference between enterprise value and equity value?
Enterprise value is before debt and cash; equity value is enterprise value less net debt.
Explore Related Questions
Ready to see what you can calculate?
Open the calculator and get personalized results in seconds.