Business Valuation Calculator | Mehmi Financial Group

Business Valuation Calculator

Estimate your business value using multiple valuation methods. Get a range to guide negotiations and planning.

Seller's Discretionary Earnings (SDE)

SDE is the most common method for valuing small businesses under $5M. It represents the total financial benefit to a single owner-operator, including salary, perks, and profit.

Estimated Business Value
$0
at 2.5x SDE

SDE Calculation

Net Profit$120,000
+ Owner's Compensation$95,000
+ Depreciation & Amortization$10,000
+ Interest$8,000
+ One-Time Items$5,000
= SDE$238,000

Valuation Range

$476K
Low (2x)
$595K
Mid (2.5x)
$714K
High (3x)
40%
Buyer ROI

SDE = Net Profit + Owner's Salary + Benefits + D&A + Interest + Non-Recurring

SDE represents the total benefit available to a working owner. It's ideal for businesses where the owner is actively involved in operations.

1.5x - 2.5x: Small businesses, high owner-dependency, limited growth

2.5x - 3.5x: Established businesses, some systems, moderate growth

3.5x - 4.5x: Strong businesses, management team, recurring revenue

*All amounts in Canadian dollars. Estimates only—this is not a financing offer or approval. Taxes (GST/PST/HST) NOT included.

Use this business valuation calculator to estimate a reasonable value range using three common methods: Seller’s Discretionary Earnings multiple, earnings before interest, taxes, depreciation, and amortization multiple, and revenue multiple. This tool is designed for Canadian business owners who want a starting point for negotiations, succession planning, partner buyouts, or lender conversations.

What this calculator estimates

  • Value based on Seller’s Discretionary Earnings for owner-operated businesses
  • Enterprise value and equity value using earnings before interest, taxes, depreciation, and amortization
  • Revenue multiple valuation for high-growth or early-stage companies
  • A side-by-side comparison to help you find a defensible range

FAQs

Everything you need to know about how this calculator works, what the results mean, and what is included. If you need a quote or help reviewing your numbers, feel free to contact our credit analysts.
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What is Seller’s Discretionary Earnings?
Seller’s Discretionary Earnings is the total financial benefit available to a single owner-operator. It typically includes net profit plus owner pay and common add-backs.
What add-backs should I include?
Common add-backs include owner salary, certain owner benefits, non-recurring expenses, and interest. Add-backs should be supportable with records.
What is the difference between enterprise value and equity value?
Enterprise value is the value of the operations. Equity value is what owners receive after subtracting debt and adding cash.
Which valuation method is most accurate?
No single method is always best. The most appropriate method depends on business size, owner involvement, growth profile, and the quality of financial statements.
What is a typical valuation multiple?
Multiples vary by industry, risk, concentration, and growth. Smaller owner-operated businesses often trade at lower multiples than scalable businesses with a management team.
Should I use annual or monthly numbers?
Use annual numbers for valuation multiples. If you only have monthly results, annualize them carefully and confirm seasonality.

Disclaimer:
This Truck & Heavy Equipment Financing Calculator is provided for informational purposes only. It offers estimates based on the information provided and current average rates, which may vary depending on individual creditworthiness, lender policies, market conditions, and other factors. This calculator does not constitute a loan offer, lease offer, or approval from Mehmi Financial Group or its affiliates. Please contact Mehmi Financial Group directly to confirm current rates, terms, and actual financing availability. Mehmi Financial Group accepts no liability for decisions made using this calculator.

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