Start with the basis
A valuation scenario is a set of assumptions. State whether the multiple applies to normalized profit, seller discretionary earnings, EBITDA or annual recurring revenue. Do not substitute one measure for another because its resulting number looks better.
Next distinguish enterprise value from equity value. In the simplified cash-free/debt-free scenario used by our tool, equity value equals enterprise value plus excess cash less debt. A real agreement can include working-capital targets, preferences and other adjustments.
Follow the closing waterfall
An illustrative company valued at $200,000, with $20,000 of debt and $5,000 excess cash, has $185,000 of modeled equity value. An owner of 80% has a $148,000 gross share before fees, tax and other terms. If 70% of that share is paid at closing, the modeled closing cash is $103,600—not $200,000.
Seller financing, holdbacks, earnouts and retention compensation are not interchangeable. Some amounts arrive later, some are contingent, and some compensate future work rather than ownership.
Keep assumptions editable
The free calculator separates those inputs and exposes the fee model. It does not estimate your tax or certify a market price. Bring its output to the appropriate transaction, legal and tax professionals rather than treating a range as a promise.
Original educational framework and illustrative arithmetic. No reported transaction or appraisal is asserted.