Irish Calculators
Business

Business Valuation: DCF, EBITDA and Net Assets

Choose a cash-flow, earnings-multiple or net-asset approach to estimate a business equity-value scenario. Supply defensible inputs; company-name lookups, live market multiples and sale-price guarantees are not provided.

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Your numbers

One year-end unlevered free cash flow per row, before debt service. Negative forecast years are allowed; no headers.
%
%
Required only for perpetual terminal value. Leave blank when no terminal value is used.
Your figures stay on this device.

How the calculation works

Build an equity-value scenario using discounted cash flow, an earnings multiple or supported net assets. Each method requires different evidence; the calculator makes the arithmetic explicit without independently researching or appraising the business.

DCF enterprise value = sum(FCFFt / (1 + r)^t) + terminal value discounted to today. Perpetual terminal value = final FCFF × (1 + g) / (r − g), with r > g. Multiple enterprise value = EBITDA × EV/EBITDA. Equity value = enterprise value + surplus cash − debt. Net-asset equity value = assets − liabilities.

  1. Establish the operating or asset basis

    DCF uses annual forecast cash flows; the multiple method uses EBITDA and an EV/EBITDA multiple. Net-asset mode instead subtracts supported liabilities from supported asset values.

  2. Calculate the method's value

    Discount each DCF cash flow to today, adding a discounted terminal value only if enabled. Multiple mode multiplies EBITDA by the supplied multiple rather than selecting an industry benchmark.

  3. Bridge to shareholders' equity

    Add surplus cash and deduct debt from enterprise value in DCF or multiple mode. Do not repeat that bridge after a net-asset calculation that already deducts all liabilities.

Worked example: Earnings multiple

Sample inputs demonstrate the method. They are not a forecast or product offer.

The first example applies a multiple of five to EBITDA of €100,000, giving €500,000 enterprise value. Adding €20,000 surplus cash and deducting €100,000 debt produces an equity-value scenario of €420,000.

Valuation method
EBITDA enterprise-value multiple
Maintainable EBITDA
100000
Enterprise-value / EBITDA multiple
5
Surplus cash added to enterprise value
20000
Debt and debt-like claims deducted
100000

Expected result

Enterprise value scenario
€500,000.00
Equity value scenario
€420,000.00
Worked example: Two-year cash flows

Sample inputs demonstrate the method. They are not a forecast or product offer.

Valuation method
Enterprise cash-flow DCF
Annual free cash flow to the firm
110 121
Annual enterprise discount rate (%)
10
DCF terminal value
No value beyond the forecast
Perpetual annual growth rate (%)
2
Surplus cash added to enterprise value
0
Debt and debt-like claims deducted
0

Expected result

Enterprise value scenario
€200.00
Equity value scenario
€200.00
Worked example: Net assets

Sample inputs demonstrate the method. They are not a forecast or product offer.

Valuation method
Net asset equity value
Supported asset values
800000
All liabilities for the net-asset method
300000

Expected result

Equity value scenario
€500,000.00

Understanding your result

Value is sensitive to forecasts, terminal growth, discount rate and comparable multiples. Change assumptions deliberately and consider whether the resulting range remains supportable rather than treating one output as a transaction price.

A terminal value assumes continuing cash flows beyond the explicit forecast. Switching it off limits DCF to the entered years; neither choice is a substitute for deciding what the business evidence supports.

Questions you might have

Why is debt subtracted after a DCF?

This DCF discounts free cash flow to the firm and therefore estimates enterprise value. Debt-like claims are deducted and surplus cash is added to reach the equity scenario.

Choosing the right inputs

Valuation method
Choose a method appropriate to the evidence available. DCF and EBITDA multiples first estimate enterprise value, whereas net assets already produce an equity-value scenario.
Annual free cash flow to the firm
For DCF, enter annual year-end free cash flow to the firm, before debt-service payments. Do not use equity cash flow and then deduct debt again.
Annual enterprise discount rate
Use an annual enterprise discount rate consistent with the cash flows. If perpetual terminal growth is enabled, this rate must exceed the supplied growth rate.
Surplus cash added to enterprise value
For DCF and multiples, add only surplus cash appropriate to the enterprise-to-equity bridge. Debt and debt-like claims have their own deduction field.

Common mistakes to avoid

  • Do not combine enterprise cash flows with an equity-only discount rate without a consistent valuation basis.
  • Do not assume a supplied EBITDA multiple is validated by this tool or use liabilities twice in net-asset mode.

Assumptions to check

  • Use amounts in one currency and one reporting period. Results are labelled EUR; the arithmetic also works for another consistent currency.
  • Inputs require supportable business forecasts and valuation assumptions. The model cannot establish them from a company name or website.
  • Terminal value is optional. Multiple and net-asset methods answer the same equity-value scenario through explicitly different valuation approaches.

Sources and method

Read our calculation and testing approach.