Business Valuation Tool

Your Online Business Value Calculator

ExitAdviser's business valuation approach gives you the confidence to defend your asking price in front of any prospective buyer. It takes the expected future cash flows and "discounts" them back to the present day, to give you a well-reasoned valuation.

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How it Works

The Business Valuation Tool uses the discounted cash flows (DCF) method to determine the value of a business.

DCF takes into account all forecasted future cash flows adjusted for their time value. That’s because the buying power of today’s money is not the same as money received in future years. This "time value of money" specifically recognizes the erosion of money’s value through inflation and the foregone interest payments that the buyer could have received, for example by holding secure government bonds, had they not bought your business.

Looked at another way, a dollar held today has greater buying power than the same dollar received and spent at some time in the future. It’s the DCF calculation that makes this necessary adjustment back to the present.

DCF takes the forecast cash flows, whether into or out of the business, over the next four years. Discounting these future cash flows back to the present time is the best way of accounting for business and financial risk.