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Simple Business Valuation (Multiples & Single-Stage DCF) template

For putting a rough, defensible number on a private business with an earnings multiple and a simple discounted cash flow, to open a serious conversation. Leave it alone when a transaction, a tax event or a dispute is on the table; that needs a qualified valuer. Instead A qualified valuer or accountant; a transaction, a tax event or a dispute needs a figure that carries weight.

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Simple Business Valuation (Multiples & Single-Stage DCF) diagram: Earnings-multiple valuation, Single-stage DCF (Gordon Growth), Sanity-check / triangulation.

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Or work it through here

Enter last full year EBITDA and free cash flow, a comparable sector multiple, and your growth and discount rate assumptions to see the multiple-based and DCF-based enterprise values side by side. Your entries persist for this browser session and can be copied out as Markdown or printed.

Situation being worked

Inputs

EBITDA (last full year, normalised) (£)Comparable sector multipleFree cash flow (last full year) (£)Long-term growth rate assumption (%)Discount rate (required return) (%)

Result

Multiple-based valuation: £1,960,000
Gordon Growth valuation: £2,108,000

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What you may do with it

This sheet, meaning our drawing and layout of it, is released under Creative Commons Attribution 4.0 International. Use it commercially, put it in a client deck, print it for a workshop, adapt it. Keep the attribution line that is printed on the sheet and you have met the licence.

Originator: Myron J. Gordon and Eli Shapiro (origin of the dividend-discount growth formula this tool borrows for its DCF side); earnings-multiple valuation has no single originator, it is standard market practice built up by generations of dealmakers and advisers. The framework itself is not ours to license, and the written entry behind this page, its worked example, critiques and sources, stays all rights reserved. The full licence position is set out in plain English.

Before you fill it in

A blank template is the easy part. The entry behind it covers how to run Simple Business Valuation (Multiples & Single-Stage DCF) properly, a worked example, the pitfalls real teams hit, and the situations where it is the wrong tool and something else would serve better.

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