Free tool

Business Valuation Calculator for Newcastle and Hunter Owners

Put in your own numbers and watch the four methods a certified valuer uses turn them into a value range, with each step of the arithmetic shown.

This free calculator lets owners in Newcastle and the Hunter test a value range with four methods: capitalised earnings, discounted cash flow, an earnings multiple and adjusted net assets. Each rate or multiple takes a low and a high setting, which is why the result is a band and not one number. It teaches the method; it is not a valuation.

Estimate your range

Choose a method and add your figures

Pick one of the four methods and type your numbers in; the range updates as you go. Your figures stay on your own device, and no email address is asked for.

Your figures

The starting numbers are placeholders that show how the form responds. Swap in your own, and give both a low and a high rate so you see a spread rather than a point estimate.

Step 1. Normalise the earnings

Your accounts show the business the way you run it, which is not always how a buyer would take it over. This step restates profit from the buyer's position. Add-backs go in as positive numbers, deductions as negative ones.

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Maintainable earnings A$0

Step 2. Capitalisation rate

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Equity bridge, optional

Capitalised earnings and multiples produce enterprise value: what the trading business is worth to its lenders and owners combined. Take off the debt, add back assets the business does not need, and you are close to what the owner would take home.

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Enterprise value range

Enterprise value
Less interest-bearing debt
Plus surplus assets
Equity value

Not included in this result

  • A check on whether the earnings you typed in will hold up
  • Discounts for a minority stake or for shares with no ready buyer
  • Comparable sales chosen for your industry, size and region
  • Goodwill that depends on you personally and would go when you do
  • Tax, working capital, contingent liabilities and the terms of your lease
The sums are done in your browser; nothing you enter is sent anywhere or stored. Speak to a certified valuer

This is not a valuation

The calculator multiplies and divides the numbers you give it, and nothing more. It has not seen your accounts, cannot judge whether your earnings will last, picks no comparable sales, and makes no allowance for a minority stake or for an interest that would be hard to sell. Treat it as general education rather than financial, legal or valuation advice, and do not rely on it for a sale, a court matter or a tax position.

If a lender, a court, the ATO or another party has to rely on the figure, we prepare one of three reports. An Indicative valuation is for internal decision-making and is not written for third party reliance. A Summary report sets out the approaches applied and the reasoning behind them. A Detailed report applies and reconciles all relevant approaches in full, for review by a court, the ATO, a lender or another expert.

The methods

The four methods behind the form

Capitalisation of earnings

Takes one year of maintainable earnings and divides it by a capitalisation rate. It works for a settled business with steady results, say a physiotherapy practice in Charlestown, where one representative year is a fair guide to the next few.

Income approach

Discounted cash flow

Forecasts cash flow year by year and discounts each year back to today. Use it when the path is uneven: a mining services contractor in the Upper Hunter adjusting to the energy transition, or a defence supplier at Williamtown whose main contract comes up for renewal in year three.

Income approach

Market multiple

Takes maintainable earnings and multiplies them by a figure that comparable sales support. The answer is only as reliable as the sales behind the multiple, and finding them is the part a calculator cannot do for you, whether you run a restaurant on Beaumont Street in Hamilton or a cellar door in Pokolbin.

Market approach

Adjusted net assets

Revalues each asset at market and deducts what the business owes. It takes the lead for a plant-heavy operation such as a fabrication shop in Beresfield, and it puts a floor under the other three methods.

Asset approach
Limits

Where arithmetic ends and judgement takes over

The sums take a second; choosing what goes into them is the work. Will the earnings you typed in last? Which recent sales across the Hunter genuinely resemble your business? How much of the goodwill walks out with you? If you trade from a shop or centre lease under the Retail Leases Act 1994 (NSW), how many years are left on it? How much of the revenue hangs on one or two large customers, a mine operator for instance? A form cannot answer any of that.

Nowhere is this clearer than with the capitalisation rate. In an engagement the valuer builds it up from a risk-free rate taken from long-term Australian Government bond yields, then adds an equity risk premium, a size premium, an industry premium and a premium for risks particular to your business. In this form you just type a number. Move it a few points either way and the result changes a great deal, however exact the figure on screen appears.

Broker rules of thumb, such as a set multiple of turnover or of gross fees, belong in the same category: useful as a sense-check, unreliable as an answer. Two Hunter businesses of the same size in the same trade can carry very different margins and risks, and a rule of thumb prices them identically.

Questions

Calculator questions answered

Start from maintainable earnings: reported profit adjusted so it carries a market salary in place of your drawings, rent at an arm's length level, and no one-off items. Those earnings can then be valued in three ways: divided by a capitalisation rate, multiplied by a multiple drawn from comparable sales, or projected forward as cash flows and discounted to today. Each route gives enterprise value. Subtract interest-bearing debt and add surplus assets to arrive at the equity value an owner would actually receive.
No. It is a learning tool that does arithmetic on your inputs. It has not reviewed your accounts, tested your assumptions, chosen comparable sales or applied control and marketability discounts. A valuation is a written opinion, signed by a qualified valuer who will defend it if it is challenged. The lightest of our three report types, the Indicative valuation, is itself for internal decision-making and is not written for third party reliance.
A single figure claims more precision than any method can support. Give it a low and a high rate or multiple and it values the business at each of them. A valuer works the same way: arrives at a range, narrows it to a point only when the purpose calls for one, and explains in the report where the conclusion sits and why.
Most owners want equity value. A capitalisation rate or multiple produces enterprise value, which is what the trading operations are worth to lenders and shareholders taken together. Equity value is the shareholders' part: enterprise value minus interest-bearing debt, plus surplus or non-operating assets. The calculator shows that bridge as a separate step, so both numbers appear together.
It is the one input a calculator cannot provide, and it carries most of the judgement. A capitalisation rate is assembled from a risk-free rate, an equity risk premium, a size premium, an industry premium and a premium for risks specific to your business, such as reliance on a handful of customers or on you. A multiple should be drawn from genuine comparable sales screened for industry, size, growth and location, not from a figure someone quoted at a barbecue.
Your accounts record the profit of the business as you choose to run it, which is not what a new owner would take over. Normalising replaces your drawings with a market salary, resets related-party rent to market, takes out one-off items and removes income from assets the business does not need. Valuers disagree about normalisation more than about anything else, which is why the calculator makes it the first step you see.
No. A property settlement in the Newcastle registry of the Federal Circuit and Family Court of Australia, a small business CGT concession claim with the ATO, a transfer or landholder duty question from Revenue NSW, or an oppression claim in the Supreme Court of New South Wales each needs a written opinion from a certified valuer who has worked through your records and will defend the figure. The calculator helps you see how that answer is built before the conversation; it cannot stand in for it.
No. It is plain JavaScript that runs inside the browser on your own device. Nothing you enter is sent, logged or kept, and you are not asked for an email address or phone number before the result appears.
Only as far as the assumptions you feed it, which is why it gives a range and shows the working. It cannot assess the quality of your earnings, how concentrated your customer base is, how secure your lease is, or whether the goodwill would stay if you left. Use it to prepare for a conversation with your accountant or with us, never to set a price.
Keep reading

Where to go next

Methodology How the income, market and asset approaches work By sector Hunter industries we value Report depth Comparing the Indicative, Summary and Detailed reports
Certified Valuations

Certified Valuation Reports From Seven Business Days

When the number has to be defended, a calculator is not enough. Every report is signed by a credentialed certified valuer and built to withstand ATO, ASIC, court and bank scrutiny.

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