Electrical Business Valuation Calculator

This Electrical Business Valuation calculator allows you to estimate the financial worth or value of your electrical business by inputting key financial metrics like annual revenue, number of employees, company valuation multiplier, and cost of sales.

What is an electrical business valuation calculator?

An electrical business valuation calculator is a tool used to estimate the financial worth or value of a business. It usually requires specific details about your business, like annual revenue, number of employees, company valuation multiplier, and cost of sales. This lets the calculator determine the overall value of a business based on key financial metrics and standard performance indicators.

Who uses an electrical business valuation calculator?

Many business owners, analysts, investors, and lenders in the electrical industry use an electrical business valuation calculator. This tool helps assess the value and performance of electrical-based businesses for better decision-making. Owners plan strategies, analysts evaluate viability, investors look at opportunities, and lenders determine loan terms. An electrical business valuation calculator is an essential tool for optimizing electrical business value.

What information is included in an electrical business valuation calculator?

To effectively use an electrical business valuation calculator, you’ll need have the following information on hand:

1. Annual Revenue: Total revenue generated by the business in a year.

2. Cost of Sales Last Year: Total expenses directly associated with the production of goods sold in the previous year.

3. Total Value of Company’s Assets: The combined value of all assets owned by the business.

4. Company Valuation Multiplier: Helps estimate the value of your company based on Net Profit.

5. How many technicians work at your company?

6. How many office staff work at your company?

7. Average Monthly Salary of a Technician

8. Average Monthly Salary of a Office Staff

9. Overhead Expenses: Total ongoing business expenses not directly tied to creating a product or service.

Formulas Used in the electrical Business Valuation Calculator

1. Gross Profit

       GP = AR − COS

       Where:

            – GP is the Gross Profit.

            – AR is Annual Revenue.

            – COS is Cost of Sales.

2. Net Profit

      Net Profit = Gross Profit – (Overhead Expenses + Cost of Technician + Cost of Office Staff)

      where:

      – Cost of Technician = (How many technicians work at your company * Average monthly salary of a technician) * 12

       – Cost of of an office staff = (How many office staff work at your company * Average monthly Salary of an office staff) * 12

3. Estimated Business Valuation

       Estimated Company Value = (Net Profit + Total value of company’s assets) * Company valuation multiplier

Example of How to Calculate Business Valuation:

Annual Revenue (AR): $1,000,000

Cost of Sales Last Year (COS): $400,000

Overhead Expenses (OE): $200,000

Total Value of Company’s Assets (VA): $300,000

Company valuation multiplier (M): 5X

How many technicians work at your company: 5

Average monthly salary of a technician: $2,000

How many office staff work at your company: 5

Average monthly Salary of an office staff: $1,000

Calculations:

1. Gross Profit (GP):

       GP = $1,000,000 – $400,000 = $600,000

2. Net Profit:

      Net Profit = $600,000 – ($200,000 + $120,000 + $60,000) = $220,000

3. Estimated Business Value:

      Estimated Business Value = ($220,000 + $300,000) * 5 = $2,600,000