Practice Valuation Calculator

How It Works

Calculates practice value from the figures you supply, under up to five methods. The Revenue Multiple method runs once you set your revenue multiple in Settings. Discounted Cash Flow and EBITDA Multiple run only when you have entered your EBITDA inputs (recurring revenue, profit margin and owner compensation) and they give a positive value, and each also needs its Settings figure (the discount rate, the EBITDA multiple). AUM Percentage and Revenue Multiple Sensitivity run only when you enter a rate or multiple. The revenue and EBITDA multiples and the discount rate are the ones you set in Settings; a method whose figure you have not set is left out, and the screen says Not set. The DCF starts pre-filled with 5% growth, a 3.5x terminal multiple and 5 years, which you can change. The result is the weighted mean of the methods present. The default weights (40% Discounted Cash Flow, 20% Revenue Multiple, 20% EBITDA Multiple, 10% AUM Percentage, 10% Revenue Multiple Sensitivity) can be adjusted; nothing here has measured which method predicts a real sale better than another. The range shown runs from the lowest to the highest of your weighted methods, and there is no recommended price. A labeled mode switch reframes the same arithmetic for two lanes: Sell-side/Exit (your practice) and Buy-side/Acquire (a target firm, with a link to target discovery).

Data Sources

• •Your own practice figures and the assumptions you enter; no SEC filing data is read

Audit Parameters

• •Method: weighted mean of the methods present (adjustable weights)
• •Multiples and discount rate: yours from Settings; a method whose figure is not set is left out
• •Modes: Sell-side (Exit) + Buy-side (Acquire)