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Purchase Multiple calculator

Purchase Price Multiple Calculator

Divide a proposed purchase price by the relevant annual earnings or revenue measure.

FormulaPurchase multiple = purchase price / annual metric
Calculator

Purchase Price Multiple Calculator

Enter your numbers and the result updates straight away.

Results

Outputs

SDE multiple
Waiting for valid inputs
EBITDA multiple
Waiting for valid inputs
Revenue multiple
Waiting for valid inputs

Planning estimate only. Verify assumptions before making a financial decision.

Worked example

A $900,000 price divided by $300,000 SDE equals a 3.0x SDE multiple.

Methodology

How this calculation works

The calculator reports each multiple only when the corresponding denominator is positive.

How to interpret the result

A lower multiple is not automatically a better deal; durability, growth, concentration, capital needs, and owner dependency matter.

Limitations

Results are educational planning estimates. They do not include every tax, legal, accounting, financing, or business-specific consideration and are not professional advice.

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Formula and example
Purchase multiple = purchase price / annual metric

A $900,000 price divided by $300,000 SDE equals a 3.0x SDE multiple.

Common use cases
  • Compare an asking price with market evidence.
  • Standardize multiple comparisons.
  • Check how adjustments change the implied multiple.
Purchase Price Multiple Calculator FAQ

Which multiple should a small business use?

Owner-operated businesses commonly reference SDE, while larger manager-run companies may use EBITDA. Revenue multiples require suitable industry evidence.

Is a lower multiple always a better deal?

No. Low multiples can reflect customer concentration, decline, owner dependency, capital requirements, or other material risks.

How is Purchase Multiple calculated?

The calculator reports each multiple only when the corresponding denominator is positive.

How should I interpret the result?

A lower multiple is not automatically a better deal; durability, growth, concentration, capital needs, and owner dependency matter.