1. What Is Company Valuation?

Company valuation is the process of determining the economic value of a business. In India, the revenue multiple method is commonly used, especially for startups and growing companies, where valuation is calculated by multiplying annual revenue by an industry-specific multiple.

2. How Does The Calculator Work?

The calculator uses the revenue multiple formula:

Where:

• \( \text{Revenue} \) — Annual revenue in Indian Rupees (INR)
• \( \text{Industry Multiple} \) — Industry-specific multiplier (dimensionless)

Explanation: This method provides a quick estimate of company worth based on revenue performance and industry benchmarks. Different industries have different typical multiples based on growth potential, profitability, and market conditions.

3. Importance Of Company Valuation

Details: Accurate company valuation is crucial for fundraising, mergers and acquisitions, investment decisions, financial reporting, and strategic planning. It helps determine fair market value and negotiate better deals.

4. Using The Calculator

Tips: Enter annual revenue in INR and the appropriate industry multiple. Common multiples range from 2x to 10x depending on the industry, growth stage, and market conditions. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are typical industry multiples in India?
A: Multiples vary by industry: IT services (2-4x), e-commerce (3-6x), SaaS (5-10x), manufacturing (1-3x). The multiple depends on growth rate, profitability, and market position.

Q2: Is revenue multiple the only valuation method?
A: No, other methods include EBITDA multiple, discounted cash flow (DCF), comparable company analysis, and asset-based valuation. The appropriate method depends on the company's stage and industry.

Q3: How often should company valuation be updated?
A: Valuation should be updated annually or when significant events occur (funding rounds, major contracts, market changes) that affect the company's financial performance or prospects.

Q4: Does this work for pre-revenue startups?
A: The revenue multiple method is not suitable for pre-revenue companies. For such startups, valuation is typically based on future projections, market size, team strength, and intellectual property.

Q5: How accurate is this valuation method?
A: While useful for quick estimates, revenue multiples provide a simplified valuation. For precise valuation, especially for large transactions, multiple methods should be used and professional valuation services consulted.