Accounting Revenue Multiple (Monthly) Calculator
Estimate an accounting firm's indicative value by applying a monthly revenue multiple to its recurring monthly revenue.
Overview
Use this Accounting Revenue Multiple (Monthly) Calculator to estimate an indicative value for an accounting practice or firm. Enter average monthly revenue, select a monthly revenue multiple, and adjust for business debt and surplus cash.
How it works
The calculator multiplies average monthly revenue by the monthly revenue multiple to estimate enterprise value. It then subtracts business debt and adds surplus cash to estimate equity value. For context, it also converts monthly revenue into an annualized revenue run rate and shows the equivalent annual revenue multiple. A revenue multiple is only one valuation approach; sustainable profit, client retention, growth, concentration, team strength, and transaction terms can all affect a real-world valuation.
How to use this calculator
- 1Enter the firm’s typical monthly recurring revenue.
- 2Choose the monthly revenue multiple you want to test.
- 3Add any interest-bearing business debt.
- 4Add surplus cash if it is expected to transfer with the business.
- 5Review the estimated enterprise value and equity value.
Example Calculation
Monthly Revenue
$25,000
Monthly Revenue Multiple
12
Business Debt
$40,000
Cash Balance
$10,000
Indicative Enterprise Value
$300,000
With monthly revenue of $25,000 and a 12x monthly revenue multiple, the estimated enterprise value is $300,000. After subtracting $40,000 of debt and adding $10,000 of cash, the indicative equity value is $270,000.
Frequently asked questions
What is a monthly revenue multiple?
It is a valuation factor applied to one month of revenue. For example, a 12x monthly multiple values $25,000 of monthly revenue at $300,000 before debt and cash adjustments.
How does a monthly revenue multiple compare with an annual revenue multiple?
A monthly multiple can be divided by 12 to express it on an annual revenue basis. A 12x monthly revenue multiple is equivalent to 1.0x annualized revenue.
Should I use total revenue or recurring revenue?
Use sustainable recurring revenue where possible. One-off projects, unusual billings, and revenue that is unlikely to continue may overstate the estimate.
Why are debt and cash adjusted separately?
The revenue multiple estimates enterprise value. Debt generally reduces the value available to owners, while surplus cash may increase it, producing an indicative equity value.
What affects an accounting firm's revenue multiple?
Common factors include recurring client fees, client retention, profitability, growth, client concentration, service mix, staff capability, systems, and local buyer demand.
Does this calculator include taxes or sale costs?
No. The estimate does not include taxes, legal fees, broker fees, working-capital adjustments, or other transaction-specific costs.
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Assumptions and warnings
Assumptions
- Monthly revenue is representative of a normal, sustainable level of recurring revenue.
- The selected multiple reflects factors such as client retention, growth, profitability, service mix, and market conditions.
- Business debt reduces equity value, while surplus cash increases it.
- The calculation is an estimate and excludes transaction costs, taxes, working-capital adjustments, and other deal-specific terms.
Warnings
- This calculator provides an estimate only and is not financial, accounting, tax, or valuation advice.
- Actual sale values can differ materially based on profitability, client concentration, contracts, due diligence, and buyer demand.