Omni Valuation Calculator

Valuation Formulas:

\[ \text{Valuation} = \text{Revenue} \times \text{Multiple} \] \[ \text{Valuation} = \sum \frac{\text{CF}_t}{(1+r)^t} \text{(DCF Method)} \]

Valuation Method:

Revenue:

USD

Multiple:

Estimated Valuation:

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1. What is Business Valuation?

Business valuation is the process of determining the economic value of a business or company. It's used for various purposes including sale value, establishing partner ownership, taxation, and divorce proceedings.

2. Valuation Methods

The calculator provides two primary valuation methods:

\[ \text{Revenue Multiple: Valuation} = \text{Revenue} \times \text{Industry Multiple} \] \[ \text{DCF: Valuation} = \sum_{t=1}^{n} \frac{\text{CF}_t}{(1+r)^t} \]

Revenue Multiple Method: Quick estimate based on industry standards

Simple and commonly used for startups
Relies on accurate revenue figures
Multiples vary by industry (e.g., SaaS 5-10x, Retail 0.5-2x)

Discounted Cash Flow (DCF): More detailed future cash flow analysis

Accounts for time value of money
Better for established businesses with predictable cash flows
Sensitive to discount rate assumptions

3. When to Use Each Method

Revenue Multiple: Best for early-stage companies, quick estimates, when comparing to similar companies

DCF: Best for mature businesses, when future cash flows can be reasonably predicted, for detailed analysis

4. Using the Calculator

For Revenue Multiple: Enter current annual revenue and appropriate industry multiple

For DCF: Enter projected annual cash flow, number of years, and discount rate (typically 8-15%)

5. Frequently Asked Questions (FAQ)

Q1: Which valuation method is more accurate?
A: DCF is generally more precise but requires more assumptions. Multiple method is simpler but less tailored.

Q2: Where can I find industry multiples?
A: Industry reports, transaction databases, or business brokers can provide current multiples.

Q3: What discount rate should I use?
A: Typically 10-12% for established businesses, higher for riskier ventures. Consider WACC or required ROI.

Q4: How many years should I project for DCF?
A: Usually 5-10 years. Beyond that, accuracy decreases significantly.

Q5: Should I use both methods?
A: Yes, using multiple methods provides a valuation range and checks for reasonableness.