Free tool

A Free Valuation Calculator for Hobart Businesses

Enter your own figures and see a value range from four methods a certified valuer works with, with every calculation laid out as you go.

This free calculator lets Hobart and Tasmanian owners test a value range using capitalisation of earnings, discounted cash flow, an earnings multiple or adjusted net assets. Because you set a low and a high rate or multiple, it returns a range rather than one figure. It is a teaching tool, not a valuation.

Run the numbers

Choose a method and enter your figures

Select one of the four methods and replace the sample figures with your own; the range recalculates as you type. Your figures never leave your device, and the result appears without any sign-up.

Your figures

The numbers already filled in are samples so you can see how the form behaves. Replace them with your own, and set a low and a high rate so the result is a range rather than a point.

Step 1. Normalise your earnings

Your reported profit reflects how you run the business, not what a buyer would inherit. These adjustments move it towards a buyer's view. Enter add-backs as positive figures and deductions as negative ones.

A$
A$
A$
A$
A$
Maintainable earnings A$0

Step 2. Capitalisation rate

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Equity bridge, optional

Capitalisation rates and multiples give enterprise value, which is the worth of the operations to lenders and owners together. Take away the debt and add any surplus assets to see what would be left for the owner.

A$
A$

Enterprise value range

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

Not included in this result

  • Discounts that apply to a minority stake or to an interest that is hard to sell
  • Sales evidence from businesses like yours in size, sector and location
  • Any check on whether the earnings you entered can be sustained
  • Goodwill that is personal to you and would leave with you
  • Allowances for tax, working capital, contingent liabilities and lease terms
Everything is calculated on your own device; nothing you type is sent or kept. Talk to a certified valuer

This is not a valuation

The calculator only performs arithmetic on the numbers you give it. It has not seen your financial statements, cannot tell whether your earnings will hold, does not choose comparable sales, and makes no adjustment for a minority interest or for an interest that is hard to sell. It is general education, not financial, legal or valuation advice, and it should not be relied on for a sale, a court matter or a tax position.

For a figure another party will rely on, 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

What each of the four methods does

Capitalisation of earnings

Divides one year of maintainable earnings by a capitalisation rate. It fits an established business with settled results, such as a physiotherapy practice in Sandy Bay, where one representative year stands in fairly for the years ahead.

Income approach

Discounted cash flow

Projects cash flow year by year and brings each year back to today's value. It fits a business on a changing path, such as a tour operator adding a second vessel or a civil contractor in Cambridge whose biggest contract ends in year three.

Income approach

Market multiple

Multiplies maintainable earnings by a multiple derived from comparable sales. The answer is only as sound as the sales behind the multiple, and a market the size of Tasmania's produces fewer of them, which is a gap no calculator can fill for a North Hobart cafe or anything else.

Market approach

Adjusted net assets

Restates each asset at market value and subtracts the liabilities. It leads for a plant-heavy business such as a fabrication workshop in Moonah, and it marks the floor beneath any other result.

Asset approach
Limits

What a form cannot judge for you

The sums are the simple part; judgement sets the number. A valuer has to decide whether your earnings will last, which recent sales in greater Hobart truly resemble your business, how much of the goodwill would leave with you, how much of the revenue rests on a handful of customers, and how secure your premises are, including whether a shop lease falls under the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas). None of that fits in a form.

Seasonality is a particular trap here. A cafe near Salamanca Market, a tour operator or a cellar door can take much of its year over summer and during the winter festival season, so annualising one busy quarter, or one quiet one, will mislead. A valuer works from full years and tests them against the trading pattern.

The capitalisation rate shows the gap most clearly. In a real engagement it is built from a risk-free rate based on long-dated Australian Government bond yields, an equity risk premium, a size premium, an industry premium and a loading for risks specific to your business. Here you simply type it in, and a rate a few points out shifts the result by the same proportion, however precise the screen looks.

A broker's rule of thumb, such as a flat multiple of turnover or of gross fees, is a sense-check at best. It treats a high-margin business and a struggling one alike, when margin and risk are exactly what separate two firms of the same size in the same trade.

Questions

Calculator questions from Hobart owners

Begin with maintainable earnings: reported profit adjusted so it carries a market wage for your role, market rent for the premises, and nothing that will not happen again. Then value those earnings one of three ways: divide by a capitalisation rate, multiply by a multiple drawn from comparable sales, or forecast the cash flows and discount them to today. That gives enterprise value; take off interest-bearing debt and add surplus assets to reach the equity an owner would actually receive.
No. It is a teaching tool that runs sums on whatever you enter. It has not read your accounts, challenged your assumptions, selected comparable sales or applied control and marketability discounts. A valuation is a written opinion that a qualified valuer signs and will defend if it is challenged. Even an Indicative report from us, the lightest of the three, is for internal decision-making and is not written for third party reliance.
Because no method is precise enough to justify a single figure on its own. You supply a low and a high rate or multiple, and the business is valued at both. A certified valuer works the same way: arrive at a range, narrow it to a point only when the purpose demands one, and explain in writing where the conclusion sits and why.
As an owner, usually equity value. Enterprise value is what the trading operations are worth to lenders and shareholders together, and it is what a capitalisation rate or a multiple produces. Equity value is that figure less interest-bearing debt, plus any surplus or non-operating assets. The calculator sets out the bridge on its own lines so the two cannot be mixed up.
This is the judgement a calculator hands back to you. A capitalisation rate is built up from a risk-free rate, an equity risk premium, a size premium, an industry premium and a loading for risks peculiar to your business, such as dependence on a few customers or on you. A multiple should come from genuine comparable sales filtered for industry, size, growth and location; in a market the size of Tasmania's, the valuer may have to look further afield for enough evidence and adjust for the differences.
Your accounts show the business as you choose to run it, not as a new owner would take it over. Normalising swaps your drawings for a market salary, restates related-party rent at a market level, removes one-off items and strips out income from assets the business does not need. Valuers argue about normalisation more than anything else, so the calculator puts it in plain view.
No. A property settlement through the Federal Circuit and Family Court registry in Hobart, a shareholder dispute in the Supreme Court of Tasmania, or a small business CGT concession claim with the ATO each needs a written opinion from a certified valuer who has worked through the records and will stand behind the result. Treat the calculator as preparation for that conversation, never as a substitute for it.
Enter full-year figures, never one strong quarter multiplied by four. Cafes, tour operators and cellar doors around Hobart can earn much of their year over summer and through the winter festival season, so a part-year figure can badly overstate or understate the business. If recent years were uneven, try a few averages and watch how far the range moves; a valuer would test the pattern against several years of accounts.
No. It is a short piece of JavaScript that runs only on your own device. What you type is never transmitted, recorded or kept, and the result appears without asking for your email address or phone number.
Only as far as the assumptions you give it, which is why it shows a range and every step of the working. It has no way to weigh the quality of your earnings, your reliance on a few customers, the security of your lease, or whether the goodwill would outlast you. It is a starting point for a talk with your accountant or with us, not a way to set a price.
Keep reading

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Methodology Income, market and asset approaches explained By sector How we value 20 industries in Hobart Report depth Choosing between the three report types
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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