This calculator helps you estimate your business’s Networth using methods similar to what investors use on Shark Tank. Below is a simple breakdown of how it works:

1. Net Worth (Basic Business Value)

Formula:
Net Worth = Total Assets - Total Liabilities

What it means:

• Assets = What your business owns (cash, inventory, property).
• Liabilities = What your business owes (loans, debts).
• Net worth is the value if you sold everything and paid off debts.

2. Revenue Multiple Valuation (Sales-Based Value)

Formula:
Revenue Valuation = Annual Revenue × Revenue Multiple

Example:

• If annual revenue = $500,000
• Investors use a 2x multiple
• Valuation = $500,000 × 2 = $1,000,000

Common multiples range from 1x to 5x, depending on the industry.

3. Profit Multiple Valuation (Earnings-Based Value)

Formula:
Profit Valuation = Annual Profit × Profit Multiple

Example:

• If annual profit = $200,000
• Investors use a 5x multiple
• Valuation = $200,000 × 5 = $1,000,000

Investors prefer this method as it reflects real earnings.

4. Discounted Cash Flow (DCF) – Future Earnings Value

Formula (Simplified):
DCF = Future Profits ÷ (1 + Discount Rate)ⁿ

Example:

• Year 1 Profit = $150,000
• Year 2 Profit = $180,000
• Discount Rate = 10%
• DCF ≈ $285,000

This method adjusts for risk, where higher risk means a higher discount rate.

5. Final Business Valuation (Shark Tank Method)

Formula:
Final Valuation = (Net Worth × 20%) + (Revenue Valuation × 30%) + (Profit Valuation × 30%) + (DCF × 20%)

Example Calculation:

• Net Worth = $700,000
• Revenue Valuation = $1,000,000
• Profit Valuation = $1,000,000
• DCF = $285,000
• Final Valuation = $797,000

This method uses a weighted average of different valuation approaches for a balanced estimate.