Company Valuation Calculator India

Business Valuation Formula:

\[ Value = EBITDA \times Industry Multiple (5-8) \]

Company Valuation (INR):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What Is Business Valuation?

Business valuation is the process of determining the economic value of a business or company. In India, EBITDA-based multiples are commonly used for valuing small to medium-sized businesses across various industries.

2. How Does The Calculator Work?

The calculator uses the industry-standard EBITDA multiple formula:

\[ Value = EBITDA \times Industry Multiple \]

Where:

\( EBITDA \) — Earnings Before Interest, Taxes, Depreciation, and Amortization (INR)
\( Industry Multiple \) — Typically ranges from 5x to 8x depending on industry and growth prospects

Explanation: The EBITDA multiple method is widely accepted in India for business valuation as it focuses on operational profitability and allows comparison across companies.

3. Importance Of Business Valuation

Details: Accurate business valuation is crucial for mergers and acquisitions, fundraising, exit planning, partnership dissolution, and strategic decision-making in the Indian business context.

4. Using The Calculator

Tips: Enter your company's EBITDA in Indian Rupees and select an appropriate industry multiple based on your sector, growth rate, and market conditions.

5. Frequently Asked Questions (FAQ)

Q1: What is EBITDA and how is it calculated?
A: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It's calculated as: Revenue - Expenses (excluding interest, taxes, depreciation, and amortization).

Q2: Why use multiples of 5-8 for Indian businesses?
A: This range reflects typical market multiples for Indian SMEs. Higher multiples apply to high-growth sectors like technology, while lower multiples suit traditional businesses.

Q3: Are there other valuation methods used in India?
A: Yes, other methods include Discounted Cash Flow (DCF), Asset-based valuation, and Comparable Company Analysis, but EBITDA multiples are most common for quick estimates.

Q4: How accurate is this valuation method?
A: It provides a good estimate but should be supplemented with professional valuation for important transactions. Accuracy depends on choosing the right multiple.

Q5: When should I get a professional valuation?
A: For legal proceedings, major transactions, bank financing, or when precise valuation is critical for decision-making.