Estimating Your Company's Value with PER, PSR, and EV/EBITDA
When a private company or startup wants a first read on its own value, the most common approach is comparable-multiples valuation — applying the average multiple from similar public companies to your own financials. Without a full due-diligence process, multiplying net income, revenue, or EBITDA by an industry-average multiple gives you a fast, rough range for what the business might be worth.
The PER (price-to-earnings) method multiplies net income by the industry average PER, and works best for companies that already generate stable profit. The PSR (price-to-sales) method multiplies revenue by the industry average PSR, and is commonly used for early-stage companies that are growing revenue fast but aren't yet profitable. The EV/EBITDA method strips out depreciation, taxes, and interest to focus on core operating cash generation, making it a good fit for capital-intensive businesses like manufacturers with heavy equipment investment.
Averaging the results from all three methods gives a more balanced estimate than relying on just one. If the three numbers differ significantly, it's worth digging into why — differences in profit stability, growth rate, or capital structure are usually the cause.
Use this calculator as a starting point for fundraising conversations or early-stage M&A discussions. Any real transaction will require full financial due diligence and a professional valuation.
Frequently Asked Questions
None is universally the most accurate. PER suits profitable, stable companies; PSR fits early-stage companies with fast revenue growth but no profit yet; EV/EBITDA works well for capital-intensive businesses with heavy depreciation, so comparing all three gives a more balanced view.
PER, PSR, and EV/EBITDA multiples for public companies in your industry are available through brokerage research reports and financial data platforms. For private companies, use the average of comparable public peers.
This calculator gives a rough, reference-only estimate. Actual fundraising or M&A negotiations require detailed due diligence and a professional valuation — use this as a starting point to get a general sense of scale.