Finance Calculator
EBITDA Multiple Calculator
Estimate enterprise value and equity value using an EBITDA multiple. A quick way to gauge indicative business valuation for transactions, planning, or funding discussions.
Enter your EBITDA and multiple
How is EBITDA-based valuation calculated?
An EBITDA multiple valuation multiplies the company's annual EBITDA by a sector-appropriate multiple to arrive at enterprise value. Net debt is then subtracted to estimate equity value — the implied value of the owners' shares.
Enterprise Value = EBITDA × Multiple
Equity Value = Enterprise Value − Net Debt
EV/EBITDA Multiple = Enterprise Value ÷ EBITDA
For example, a business with £500,000 EBITDA and a 6× multiple has an enterprise value of £3,000,000. If net debt is £200,000, equity value is £2,800,000.
EBITDA multiples are the most common valuation methodology for private company transactions in the UK mid-market. The appropriate multiple depends on sector, size, growth, and quality of earnings.
Assumptions and caveats
- •EBITDA should ideally be adjusted for one-off or non-recurring items to reflect normalised earnings.
- •The multiple used is illustrative. Actual transaction multiples are influenced by market conditions, buyer competition, strategic value, and deal structure.
- •Net debt should include all interest-bearing borrowings minus cash. Working capital adjustments may also apply in a transaction.
- •This is a simplified model. Professional valuations consider discounted cash flow (DCF), comparable transactions, and asset-based approaches alongside multiples.
- •Results are indicative only. Seek advice from a corporate finance adviser for formal valuation.
Frequently asked questions
An EBITDA multiple is a valuation ratio that compares a company's enterprise value to its annual EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation). It is widely used in mergers, acquisitions, and business sales to estimate what a business is worth relative to its operating earnings.
EBITDA multiples vary significantly by sector, size, and growth profile. Small UK businesses may trade at 3–6× EBITDA, mid-market companies at 6–10×, and larger or high-growth businesses at 10× or above. Technology and SaaS businesses often command higher multiples than traditional sectors like manufacturing or retail.
Enterprise value (EV) represents the total value of a business, including both equity and debt. Equity value is what the owners' shares are worth after subtracting net debt. The relationship is: Equity Value = Enterprise Value − Net Debt. Net debt is typically total borrowings minus cash and cash equivalents.
Adjusted EBITDA removes one-off, non-recurring, or non-operational items to reflect the true underlying earnings of the business. Common adjustments include removing owner salaries above market rate, one-off legal costs, exceptional restructuring charges, and non-cash items. Adjusted EBITDA is almost always used in valuation rather than reported EBITDA.
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