Free tool

Free Business Valuation Calculator for Adelaide Owners

Enter your own figures and see a value range from the four methods a certified valuer works with, with every calculation laid out on screen.

This free calculator gives Adelaide and South Australian owners a value range using four methods: capitalisation of earnings, discounted cash flow, a market multiple and adjusted net assets. Because you supply a low and a high rate or multiple, the answer is a range rather than one figure. Use it to learn how valuation works, not as a valuation.

Calculate the value of your business

Pick a method, then enter your numbers

Select a method and enter your figures; the range recalculates as you type. Nothing leaves your browser, and you do not need to give an email address to see the answer.

Your figures

The numbers in the form are examples so you can see how it behaves. Replace them with your own, and enter a low and a high rate so the result is a range rather than a single point.

Step 1. Normalise your earnings

Reported profit reflects the business as you run it, not as a buyer would inherit it. Normalising restates it from the buyer's side. Enter add-backs as positive figures and deductions as negative figures.

A$
A$
A$
A$
A$
Maintainable earnings A$0

Step 2. Capitalisation rate

%
%
Equity bridge, optional

A capitalisation rate or multiple gives enterprise value, the worth of the operations to lenders and owners together. Deduct the debt and add any surplus assets, and what remains is roughly what the owner would walk away with.

A$
A$

Enterprise value range

Enterprise value
Less interest-bearing debt
Plus surplus assets
Equity value

Not included in this result

  • Any test of whether the earnings you entered are sustainable
  • Goodwill that is personal to you and would leave with you
  • Evidence from comparable sales matched to your industry, size and location
  • Allowances for tax, working capital, contingent liabilities and your lease terms
  • Discounts for a minority holding or for shares that are hard to sell
Everything runs inside your browser; nothing you type is sent or saved. Speak to a certified valuer

This is not a valuation

The calculator only does arithmetic on the numbers you enter. It has not looked at your financial statements, cannot tell whether your earnings will hold, does not choose comparable sales, and makes no allowance for a minority holding or for an interest that is hard to sell. It is general education, not financial, legal or valuation advice, and should not be relied on for a sale, a court matter or a tax position.

When someone else has to rely on the figure, we prepare one of three reports. An Indicative valuation is for internal decision-making and is not written for third party reliance. A Summary report sets out the approaches applied and the reasoning behind them. A Detailed report applies and reconciles all relevant approaches in full, for review by a court, the ATO, a lender or another expert.

The methods

The four methods behind the form

Capitalisation of earnings

Divides a single year of maintainable earnings by a capitalisation rate. It fits an established business with stable results, such as a dental practice in Unley, where one year fairly stands for the years to come.

Income approach

Discounted cash flow

Sets out a cash flow forecast for each year ahead and brings every year back to a present value. It suits a business on a changing path, such as a cyber security firm growing out of Lot Fourteen or a defence supplier near Edinburgh whose main contract ends in year three.

Income approach

Market multiple

Multiplies maintainable earnings by a multiple that comparable sales support. It is only as good as the transactions behind the multiple, and those are exactly what a calculator cannot supply, whether the business is a cafe on The Parade in Norwood or a cellar door in McLaren Vale.

Market approach

Adjusted net assets

Restates every asset at market value and subtracts the liabilities. It leads for a plant-heavy business such as an engineering workshop in Regency Park, and it sets a floor under every other method.

Asset approach
Limits

Where arithmetic ends and judgement takes over

Doing the sums takes seconds; deciding the inputs is the real work. Will the earnings you entered continue? Which recent sales in the northern suburbs, the south or around Port Adelaide truly resemble your business? How much of the goodwill is tied to you? How long does your lease have to run if you trade from premises covered by the Retail and Commercial Leases Act 1995 (SA)? How much of the revenue rests on a handful of customers? No form can answer those questions.

The capitalisation rate shows this most clearly. In a real engagement it is assembled from a risk-free rate based on long-dated Australian Government bond yields, an equity risk premium, a size premium, an industry premium and a loading for risks specific to your business. Here you simply type it. A rate a few points too high or too low shifts the answer substantially, however precise the number on screen looks.

That is also why a broker's rule of thumb, a flat multiple of turnover or of gross fees, is only ever a sense-check. It treats a high-margin business and a struggling one alike, when margin and risk are exactly what separate two businesses of the same size in the same trade.

Questions

Questions about the calculator

Begin with maintainable earnings. Adjust reported profit so it includes a market wage in place of your own drawings, rent at an arm's length level, and no one-off items. Then value those earnings in one of three ways: divide by a capitalisation rate, multiply by a multiple taken from comparable sales, or forecast the cash flows and discount them to today. That gives enterprise value; deduct interest-bearing debt and add surplus assets to reach the equity value an owner would actually receive.
No. It is a teaching tool that runs arithmetic on what you enter. It has not read your accounts, tested your assumptions, selected comparable sales or allowed for control and marketability discounts. A valuation is a written opinion signed by a qualified valuer who will defend it if challenged. Even the lightest of our three report types, the Indicative report, is for internal decision-making and is not written for third party reliance.
One number suggests more precision than any method can honestly deliver. You give a low and a high rate or multiple, and the calculator values the business at each end. Valuers work the same way: reach a range, narrow it to a point only when the purpose needs one, and explain in writing where the conclusion sits within it and why.
Owners usually care about equity value. Enterprise value is what the trading operations are worth to lenders and shareholders together, and it is what a capitalisation rate or multiple produces. Equity value is the owners' share: enterprise value less interest-bearing debt, plus any surplus or non-operating assets. Because the calculator runs that bridge as its own step, you can see both numbers side by side.
That is the input a calculator cannot supply, and it is where the judgement sits. A capitalisation rate is built from a risk-free rate, an equity risk premium, a size premium, an industry premium and a loading for risks specific to your business, such as dependence on a few customers or on you. A multiple should come from real comparable transactions screened for industry, size, growth and location, not from a number someone mentioned over coffee.
Your accounts show the profit of the business as you choose to run it, not what a new owner would step into. Normalising swaps your drawings for a market wage, restates related-party rent at market, removes one-off items and strips out income from assets the business does not need. Normalisation causes more disagreement between valuers than anything else, so the calculator puts it in plain view rather than hiding it.
No. A property settlement in the Adelaide registry of the Federal Circuit and Family Court of Australia, a small business CGT concession claim with the ATO, a stamp duty question from RevenueSA, or a shareholder dispute in the Supreme Court of South Australia each needs a written opinion from a certified valuer who has worked through the records and will defend the result. Use the calculator to understand the shape of the answer before that conversation, not in place of it.
No. The calculator is plain JavaScript that runs in your own browser. Nothing you enter is transmitted, logged or saved, and you do not need to give an email address or phone number to see the result.
It is as accurate as the assumptions you give it, which is why it returns a range and shows its working. It cannot judge the quality of your earnings, how concentrated your customers are, how secure your lease is, or whether the goodwill would survive your departure. Treat it as preparation for a talk with your accountant or with us, never as the basis for a price.
Keep reading

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Methodology The three valuation approaches By sector Adelaide valuations, industry by industry Report depth Indicative, Summary and Detailed reports
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When the number has to be defended, a calculator is not enough. Every report is signed by a credentialed certified valuer and built to withstand ATO, ASIC, court and bank scrutiny.

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