Business valuation calculators
Business Value Growth Calculator
Separate the value created by stronger earnings from the value created by a higher multiple
In short
Enterprise value grows for two separate reasons: EBITDA growth increases the earnings being valued, and multiple movement changes the price paid for each pound of those earnings. Splitting future value between the two shows how much depends on trading performance and how much on evidenced risk reduction.
Value can rise for two very different reasons, and only one of them is fully within your control. This calculator separates the value created by stronger earnings from the value created or lost through a change in the multiple.
Part of the business valuation calculators suite from BusinessValuation.co.uk. Your result is saved in this browser, so you can compare it with your other calculator results.
How to use this calculator
Enter your current adjusted EBITDA and valuation multiple, then set a future EBITDA and multiple. The calculator separates the value created through stronger earnings from the value created or lost through a change in the multiple.
Value bridge
Current enterprise value, the earnings contribution, the multiple contribution and the resulting future enterprise value.
- Current enterprise value£2,250,000
- From EBITDA growth£744,750
- From multiple movement£332,750
- Future enterprise value
- £3,327,500
How to read this result
Enterprise value moves for two separate reasons. EBITDA growth increases the earnings being valued, and multiple movement changes the price a buyer puts on each pound of those earnings. The two contributions shown here reconcile exactly to the total movement. EBITDA growth is largely within your control. Multiple improvement reflects perceived quality, risk and buyer demand, and has to be supported by evidence: a larger business does not automatically receive a higher multiple. The future figures are scenarios built from your own assumptions, not a forecast or a valuation.
How your assumptions were applied
- Future EBITDA is calculated from your annual growth assumption: current EBITDA compounded at 10 per cent for 3 years. The future EBITDA box is ignored.
- You have assumed multiple expansion. A higher multiple has to be earned through evidenced business quality, lower risk and buyer demand. Growth in size alone does not produce it.
Value bridge
- Current enterprise value: £2,250,000
- EBITDA growth contribution: £744,750
- Multiple movement contribution: £332,750
- Future enterprise value: £3,327,500
Report warning
- The future figures in this report are scenarios, not forecasts.
Suggested next steps
- Sense-check the future multiple against published sector guidance rather than assuming expansion.
- Identify the specific business improvements that would justify the multiple you entered.
- Test a scenario with no multiple movement, so you can see the value that earnings growth alone would create.
- Run the equity value calculator to see what the future enterprise value could mean in proceeds.
Your value growth position
Total value created or lost
£1,077,500
- Current adjusted EBITDA
- £500,000
- Future adjusted EBITDA
- £665,500
- Current multiple
- 4.5x
- Future multiple
- 5x
- Current enterprise value
- £2,250,000
- Future enterprise value
- £3,327,500
- Total value created or lost
- £1,077,500
- Value movement
- 47.9%
- From EBITDA growth
- £744,750
- From multiple movement
- £332,750
- Annualised enterprise value growth
- 13.9%
- Implied annual EBITDA growth
- 10%
Before you rely on this
- The future figures are scenarios built from your own assumptions. They are not a forecast or a valuation.
- A larger business does not automatically receive a higher multiple. Multiple improvement has to be supported by business quality and market evidence.
- The optional equity illustration holds cash and debt at today's figures. In practice both will change.
Next steps
Your result is above and stays visible. Discuss how to build and protect value before sale.
Important information
This calculator provides general, indicative guidance based solely on the information entered. It is not a formal business valuation, tax calculation, legal opinion or recommendation to accept or reject an offer. Actual value and sale proceeds depend on detailed financial, commercial and transaction-specific factors.
How this calculation works
- Future EBITDA = current EBITDA × (1 + growth rate)^years
- Future enterprise value = future EBITDA × future multiple
- Value from EBITDA growth = (future EBITDA − current EBITDA) × current multiple
- Value from multiple movement = future EBITDA × (future multiple − current multiple)
Worked example: five-year value build
| Adjusted EBITDA today | £800,000 |
|---|---|
| Current multiple | 5.0x |
| Current indicative enterprise value | £4,000,000 |
| Assumed EBITDA growth | 8% a year for five years |
| Future adjusted EBITDA | £1,175,000 |
| Assumed future multiple | 5.75x |
| Future indicative enterprise value | £6,756,000 |
| Value from EBITDA growth | £1,875,000 |
| Value from multiple movement | £881,000 |
The two contributions reconcile exactly to the £2.76m total movement. Roughly a third of it depends on multiple improvement, which has to be earned through evidenced risk reduction rather than assumed because the business is larger.
What each input means
- Current adjusted EBITDA
- Maintainable earnings after add-backs.
- Current multiple
- A defensible starting multiple for your sector and size.
- EBITDA growth assumption
- Annual growth you believe is deliverable.
- Future multiple assumption
- Only assume expansion where you can name the risks you will remove.
- Years
- The planning horizon.
How to read the result
The result attributes future value between earnings growth and multiple movement. Earnings growth is largely within your control. Multiple movement reflects perceived quality, risk and buyer demand at the time of exit.
What can materially change the result
- Whether growth is organic, acquisitive or price-led.
- Capital and working-capital requirements of growth.
- Concentration, contract quality and management depth, which support multiple movement.
- Sector conditions and buyer appetite at exit.
- Whether earnings quality improves alongside earnings quantity.
Limitations
- It is a scenario built from your assumptions, not a forecast or a valuation.
- A larger business does not automatically attract a higher multiple.
- It ignores debt, tax and transaction costs.
When this calculator is appropriate
Use it when setting a value-building plan and you want to see how much of the target depends on assumptions rather than trading.
When it is not appropriate
Do not present the output as a projected valuation to a lender, investor or shareholder.
Bottom line
Growth in earnings you can manage. Multiple expansion you must earn. Know which one your plan is relying on.
Questions owners ask
- What is business value growth?
- It is the change in enterprise value over a period, which for a UK SME is driven by the change in maintainable adjusted EBITDA and the change in the multiple a buyer applies to it.
- What is the difference between EBITDA growth and multiple expansion?
- EBITDA growth increases the earnings being valued. Multiple expansion increases the price paid for each pound of those earnings, and reflects perceived quality, risk and buyer demand rather than size alone.
- Does a growing business automatically receive a higher multiple?
- No. Growth helps the case, but buyers still price recurring revenue, customer concentration, management depth, owner dependence, reporting quality and margin. Many growing businesses are valued on the same multiple as before.
- What can improve a valuation multiple?
- Contracted or repeat revenue, diversified customers, a management team that runs the business without the owner, documented processes, clean and timely reporting, and credible funded growth.
- Can enterprise value fall even when EBITDA grows?
- Yes. If the multiple contracts by more than earnings grow, value falls. The split in this calculator shows exactly how much each factor contributed.
- Why might equity value grow differently from enterprise value?
- Because equity value depends on surplus cash, debt and debt-like items as well as enterprise value. Paying down debt can increase equity value even when enterprise value is unchanged.
- Is the future result a forecast?
- No. It is arithmetic applied to the assumptions you entered, shown so you can test what a target would require.
- How does this differ from the Target Exit Value Calculator?
- The target exit calculator works backwards from a value you want. This calculator works forwards from assumptions you set, and its distinctive job is to attribute the movement between earnings growth and multiple movement.
Related reading
Business exit planning
We build the value plan around what actually moves a multiple, then track it against the timetable.
Where owners usually go next
- Business Value Gap Calculator
Compare the value being built with the value you need.
- Exit Readiness Score
Test whether the risk reduction behind a higher multiple is actually happening.
Written and reviewed by Tony Vaughan, founder and lead adviser, BusinessValuation.co.uk.·Last reviewed: September 2026·How we produce these figures
Talk your figures through with us
A free initial consultation with our team, then a short written indicative range where the situation warrants it. No obligation.