Enter your assumptions

Enter earnings and base multiples to see a range.

Illustrative calculation from the figures you enter and the scenario adjustments shown above. Not an appraisal, offer, or advice. Talk to a qualified valuation professional before relying on it.

How adjustments work

Each scenario shifts both ends of your entered multiple range by the amount shown. Positive adjustments add to the multiple; negative adjustments subtract from it. The selected adjustments are summed before applying the range to earnings.

Firm size: smaller scale −0.25x, no adjustment 0x, larger scale +0.25x.
Backlog coverage: under 6 months −0.25x, 6 to 12 months 0x, over 12 months +0.25x.
Recurring public-sector client share: under 25% 0x, 25% to 49% +0.10x, 50% or more +0.20x.
Key-person risk: high −0.25x, moderate −0.10x, low 0x.
Owner dependence: high −0.25x, moderate −0.10x, low 0x.

How these adjustments were checked

Firm size: The size adjustment fits an AEC M&A adviser's view that institutional scale lowers risk and widens the buyer pool. The quarter turn step is a scenario estimate, not a measured size premium.

Backlog coverage: An industry consultancy says a pipeline of contracted work extending 12 to 24 months lowers perceived risk, while thin backlog can show up as a discounted offer. An AEC M&A adviser treats 12 or more months of profitable signed backlog as high conviction and says under 6 months caps the multiple. The consultancy adds that backlog's contribution to value depends on its trend and on market and service context. None of these sources sets scenario bands or quarter turn adjustments.

Recurring public-sector client share: The public client adjustment fits the same consultancy's link between repeatable public work and business resilience. An M&A advisory firm qualifies that benefit by collection quality, procurement timing and concentration. The revenue share bands and small premiums are scenario estimates.

Key-person risk: The key person adjustment fits the consultancy's link between leadership depth and buyer confidence and continuity risk. The moderate and high risk discounts are scenario estimates, not published discounts for those categories.

Owner dependence: The owner dependence adjustment fits an M&A advisory firm's link between transferring client trust and management authority and smaller buyer discount demands. The discount schedule is a scenario estimate, not a published calibration.

Leadership depth and founder dependence are both described in published commentary as factors that affect earnings quality and pricing. Check that the same concern is not counted in both the key-person and owner-dependence fields.

These adjustment amounts are transparent scenario assumptions for this calculator, not sourced market data, valuation guidance, or transaction evidence.

Questions behind the adjustment fields

An M&A adviser writing about AEC transactions asks whether backlog is funded and committed, and whether it can be delivered at a profit. His review separates actual assignments from an IDIQ contract ceiling and looks at staffing and conversion. A qualified valuation professional can say what those checks show before you assign a backlog adjustment.

The same adviser names founder dependence and leadership depth as issues that can affect sustainable earnings and the multiple. A founder writing about ownership transition points to distributing client relationships and decision authority as a way to reduce dependence on one person. Who holds those relationships, and who can decide without the owner? Do the earnings input, key-person field and owner-dependence field reflect overlapping assumptions? These sources offer qualitative checks, not numerical adjustment amounts.

Estimate limits

The result is a value range only. It is an estimate based on your inputs, not an appraisal or offer. It excludes debt, cash, working capital, taxes, deal structure, diligence findings, and other transaction terms. General education only, not engineering, legal, tax, or investment advice. Licensed PE judgment and local codes govern engineering work. Consult qualified transaction advisers.

What ownership interest are you discussing?

An industry publisher's valuation article notes that a minority holding need not equal its percentage of whole company value. It points to actual voting and blocking rights for a control analysis, and to transfer restrictions and realistic liquidity paths for marketability. A qualified business appraiser can identify the interest being valued and examine those conditions.

An accredited business appraiser describes weighing public company comparables, discounted cash flow and private transactions together, with judgment about company specific risk. He also cautions that a convenient formula can lose relevance after business or economic changes. Ask the appraiser how the formula would be tested for your purpose and circumstances.

Example scenario

A hypothetical civil engineering firm owner enters EBITDA of $2,000,000, base multiples of 4 and 6, and adjustment assumptions of +0.25, +0.25, +0.20, −0.10, and −0.10 for firm size, backlog, recurring public-sector share, key-person risk, and owner dependence. The calculator reports a total shift of +0.50x and a value range of $9,000,000 to $13,000,000. These are the owner’s hypothetical inputs, not market benchmarks or an appraisal. The range can help the owner frame an early conversation about whether a sale merits further study and what earnings basis and assumptions to examine. Before relying on it, check that EBITDA is defined consistently with the firm’s records, review each adjustment against actual operating conditions, and account for debt, cash, working capital, transaction terms, and diligence with qualified advisers.

Start with the earnings a buyer could support

An M&A adviser writing about AEC transactions puts sustainable earnings ahead of the multiple. His normalization test asks whether an expense or revenue item would exist under normal post-deal ownership, with documents supporting the answer.

A qualified CPA can review the proposed adjustments with you. What supports excluding a cost? Has exceptional revenue stayed in the calculation? The adviser also separates project delays from lasting client losses when assessing a weak earnings year, so the earnings history and forecasts need to address that distinction.

He also notes that buyers examine receivable aging, work in progress, write-offs and operating cash flow to test reported earnings. The CPA can help you review differences between earnings and cash conversion, including whether project timing explains them. Bring those questions to a qualified valuation professional before discussing the multiple.

Sources and further reading

Method, inputs and limits

Purpose

Build a value range from owner-entered SDE or EBITDA, user-entered base multiples, and visible scenario adjustments. This is the flagship sell-side calculator.

Inputs and defaults

Basis is SDE or EBITDA. Earnings are required, nonnegative USD. Low and high base multiples are required, nonnegative, with high at least low. No base multiple defaults are supplied; the input labels show example values of 3 and 5 only. Five selectable adjustments are applied: firm size (−0.25x, 0x, +0.25x); backlog months (under 6: −0.25x, 6 to 12: 0x, over 12: +0.25x); recurring public-sector client share (under 25%: 0x, 25% to 49%: +0.10x, 50% or more: +0.20x); key-person risk (high: −0.25x, moderate: −0.10x, low: 0x); owner dependence (same risk adjustments).

Formulas

Total shift = sum of five selected adjustments. Adjusted low multiple = max(0, base low + total shift). Adjusted high multiple = max(0, base high + total shift). Value low/high = earnings × adjusted low/high multiple. Adjustments are illustrative scenario assumptions, not sourced market data.

Scenario assumption, not sourced market data. Use the combined adjustment and zero floor as calculation conventions for exploring outcomes; the sources reviewed do not validate using the same adjustment schedule across SDE and EBITDA.

Outputs

Value range only, plus adjusted multiples. No single point estimate.

Checked cases

SDE $1,000,000, base multiples 3 and 5, adjustments 0, 0, 0, 0, 0: $3,000,000 to $5,000,000.
EBITDA $2,000,000, base multiples 4 and 6, adjustments +0.25, +0.25, +0.20, −0.10, −0.10: total +0.50x, $9,000,000 to $13,000,000.
EBITDA $500,000, base multiples 0.2 and 0.5, adjustments −0.25, −0.25, 0, −0.25, −0.25: total −1.00x, both adjusted multiples floor at zero, $0 to $0.

Disclaimer

Estimate only, not an appraisal, offer, engineering, legal, tax, or investment advice. Excludes debt, cash, working capital, transaction terms, and diligence. The adjustment amounts are transparent user scenarios, not market evidence. Licensed PE judgment and local codes govern engineering work. Consult qualified advisers.

Civil engineering firm value range