HVAC Business Valuation Calculator

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

What is an HVAC business valuation calculator?

An HVAC 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 HVAC business valuation calculator?

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

What information is included in an HVAC business valuation calculator?

To effectively use an HVAC 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 HVAC 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 * Avg. monthly salary of a technician) * 12

Cost of Technician = (How many office staff work at your company * Avg. 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

Avg. monthly salary of a technician: $2,000

How many office staff work at your company: 5

Avg. 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