Ecom Business Valuation Tool

How it works

The valuation moves in one direction: from reported net income, through add-backs, to a defensible multiple, to a net-to-seller number.

1. Inputs: Planning year, currency, and the blend weight between SDE and EBITDA
2. P&L: Your trailing 12-month income statement, from revenue through COGS, opex, operating income, taxes, and net income
3. Add-backs: Owner compensation, perks, family salaries, and one-time items, each flagged as SDE-only or both SDE and EBITDA
4. Adjusted Earnings: The bridge from net income to SDE and EBITDA via your add-backs
5. Multiples: A base multiple from your size, adjusted by 7 weighted factors, compared against recent comp transactions
6. Valuation: The final range, reconciled through inventory, debt, and excess cash to a net-to-seller figure
7. Sensitivity: A two-dimensional grid showing valuation across combinations of multiple and earnings

Steps to use it

1. Set planning year, currency, and SDE/EBITDA blend weight on Inputs
2. Enter your trailing 12-month P&L
3. List legitimate add-backs and flag each as SDE-only or both
4. Review Adjusted Earnings for the auto-computed SDE and EBITDA
5. Rate your business on 7 factors in Multiples to build your effective multiple
6. Read Valuation for the net-to-seller range, then Sensitivity to see how it moves with multiple and earnings

SDE adds back owner compensation, perks, and family salaries on top of the standard EBITDA add-backs (interest, taxes, depreciation, amortization, and non-recurring items); use it for owner-operated businesses where the buyer steps into the role. EBITDA alone fits businesses that already have professional management in place.

Most ecom brands under $2M use SDE; above that, EBITDA tends to take over.