A multiple is an assumption about comparability.
A revenue multiple converts a specified revenue metric into enterprise value. ARR and recognized annual revenue can differ substantially, so the multiple’s denominator must match the input. Public-company multiples also reflect liquidity, scale and rights that a private company may not share.
This calculator applies your chosen multiple; it does not supply market pricing. A defensible comparison requires similar growth, retention, gross margin, concentration and measurement dates. Do not mix enterprise-value multiples with equity-value multiples.
The formula, made clear.
- Annual metric
- Either annual recognized revenue or ARR, consistently matched to the selected multiple.
- EV multiple
- Enterprise value divided by that metric.
- Equity bridge
- Unfloored residual after cash and senior claims; a negative result signals a funding shortfall.
Put the numbers in context.
$3,000,000.00 annual revenue at 5× implies $15,000,000.00 enterprise value. Adding $500,000.00 cash and subtracting $1,000,000.00 debt gives $14,500,000.00 in the equity bridge.
| Input | Example value |
|---|---|
| Annual revenue or ARR | $3,000,000.00 |
| Enterprise value / selected metric | 5 × |
| Non-operating cash | $500,000.00 |
| Debt and other senior claims | $1,000,000.00 |
| Implied enterprise value | $15,000,000.00 |
What this calculation assumes
A user-supplied EV multiple, no automated comparables or claim of fair value. Cash must be non-operating and debt/senior claims consistently defined. Negative equity bridge is not a shareholder payment obligation.
Methodology references
What to consider next.
Test a range of multiples and reconcile the implied equity value with dilution and exit ownership. Record why the comparables fit.
How we approach financial models →