Earnings Multiple Valuation Calculator
This multi-method valuation calculator estimates company value using earnings multiples: P/E (equity multiple), EV/EBITDA, and revenue multiples. It supports normalized income inputs, adjustments for net debt, cash, minority interests, control premiums, and per-share results to assist transaction modelling and sanity checks.
Use this tool as a rapid approximation and calibration aid. It is not a substitute for a full valuation report prepared by a qualified appraiser or financial advisor that includes due diligence, forecast modelling, and careful reconciliation of accounting adjustments.
Governance
Record 6e4063c98fd6 • Reviewed by Fidamen Standards Committee
Estimates equity value directly by applying a P/E multiple to normalized earnings, then applies control premium and minority discount adjustments and divides by shares outstanding for per-share value.
Inputs
Results
Estimated Equity Value
$1,200,000.00
Estimated Price per Share
$120.00
| Output | Value | Unit |
|---|---|---|
| Estimated Equity Value | $1,200,000.00 | USD |
| Estimated Price per Share | $120.00 | USD |
Visualization
Methodology
The calculator applies widely used market multiple techniques: multiply an earnings metric by an appropriate multiple, then reconcile enterprise-to-equity values by adding cash and subtracting net debt and minority interests. P/E is applied directly to equity earnings, while EV multiples are applied to enterprise metrics and converted to equity value.
Inputs should be normalized (one-off items removed, owner compensation adjusted, non-operating gains/losses excluded). Choose industry averages only after confirming comparability in business model, growth, margin profile, capital intensity, and size.
Key takeaways
This tool provides scenario-based, multi-method valuation estimates. It is intended for quick analysis, calibration, and sensitivity exploration; it is not a substitute for formal valuation engagement.
For regulated, audited, or transaction-grade valuations, work with licensed professionals and retain source documentation, follow applicable accounting rules, and perform sensitivity and scenario analysis.
Worked examples
If normalized earnings are 200,000 and selected P/E is 8, estimated equity value = 200,000 × 8 = 1,600,000. With 100,000 shares outstanding, price per share = 16.00.
If normalized EBITDA is 300,000 and EV/EBITDA median is 6, enterprise value = 1,800,000. If net debt = 200,000 and cash = 50,000, equity value = 1,800,000 − 200,000 + 50,000 = 1,650,000.
F.A.Q.
How should I choose the multiple?
Select a multiple from comparable public companies or recent transactions that match size, growth, margin, and business model. Industry averages are a starting point; adjust using company-specific risk, growth outlook, and profitability. For regulatory or audit work, document sources and justification for the chosen multiple.
What are common adjustments to earnings before applying a multiple?
Remove non-recurring gains/losses, normalize owner compensation, adjust for related-party transactions, and restate accounting treatments where comparables use different policies. Use consistent recurring metrics for comparability.
Can this calculator be used for audited or regulatory valuations?
This tool produces indicative results. For audited or regulatory valuations, retain a licensed valuation professional. Ensure work follows applicable standards (e.g., IFRS/US GAAP for financials) and document methodology, assumptions, and sensitivity analyses.
How accurate are these estimates?
Accuracy depends on input quality and choice of multiples. These methods are sensitive to normalization choices and multiples. Use sensitivity testing and scenario analysis; disclose uncertainty and the range of plausible values.
How should I handle control premiums and minority discounts?
Control premiums and minority discounts reflect market practice and transaction evidence. Apply them as percentages to reflect the difference between controlling interest and a minority stake. Document market sources and rationale.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov/
- International Organization for Standardization (ISO) — https://www.iso.org/
- Institute of Electrical and Electronics Engineers (IEEE) — https://www.ieee.org/
- U.S. Occupational Safety and Health Administration (OSHA) — https://www.osha.gov/
- U.S. Securities and Exchange Commission (SEC) - Filings and Standards — https://www.sec.gov/
- CFA Institute — Equity Valuation Standards — https://rpc.cfainstitute.org/
- FASB ASC 820 — Fair Value Measurement — https://www.fasb.org/
- AICPA — Valuation Services — https://www.aicpa-cima.com/
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: 6e4063c98fd6What changed (latest)
v1.0.0 • 2025-11-16 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-16 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 16, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-16 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 05145e9d150c