JPAbusiness Business Calculators - Business Value & Return Calculator

On this page - The Business Return Value and Return Calculator. Sharing our experience in business with our valued clients and associates.

Business Value and Return Calculator

Are You Getting Enough Return From Your Business?

The JPAbusiness Business Value and Return Calculator helps you assess whether you're getting your expected rate of return from your business, versus the amount of funds you've invested.

Enter your figures into the fields below.

The calculator will ‘auto-calculate’ your Gross Profit and Business Maintainable Earnings.

Once you enter your final figures in Lines F and H, hit the ‘Calculate’ button to see your Weighted BME and Implied Business Value.

Please note your entries in Line F must add up to 100%.

  Year 1 Year 2 Year 3
A. Income Enter the gross income (ex GST) that the business generates on an annual basis, excluding any interest on funds invested and one-off abnormal income items.
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$
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B. Cost of Goods Sold Enter all direct costs (ex GST) associated with generating income for the business. It will include direct labour, materials, freight, commission, stock purchases and other direct costs.
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$
$
C. Gross Profit This is your gross profit, before overheads and other expenses. It represents the margin the business is deriving from its trading activities.
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$
D. Expenses Enter all other expenses that go towards running the business in a fully operating condition, including utilities costs, premises rental/lease, employee and contractor wages, a market-related amount for owner's wages (if working in the business), marketing, professional services, insurance, advertising etc. Exclude finance costs, depreciation, taxation, expenses relating to directors, dividends and any non-business-related expenses.
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$
$
E. Business Maintainable Earnings This is your Business Maintainable Earnings (BME). It is an estimate of the cash earnings generated by the business after all income and expenses are taken into account in operating the business, excluding financing and non-cash items (e.g. depreciation).
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$
$
F. Weighting Enter your weighting (as a %) for each of the 3 year's performances to determine an estimate of BME going forward. Usually the most recent year (being closest to todays conditions) is given the highest rating. However you may decide to spread your weighting between the years to take account of seasonal and other fluctations. Your entries must add to 100% exactly.
%
%
%
G. Weighted Business Maintainable Earnings This is your estimate of weighted BME per annum considering the last 3 years' business performance, and your weighting.
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H. Your Required Return (per annum) Enter your required return (% per annum) that you feel represents an acceptable level of return for your efforts and the money you have invested in the business (in goodwill, stock, working capital, plant and equipment etc..)
%
   
I. Your Implied Business Value This amount is the Implied Business Value based on your required return and estimate of your business' current weighted BME.
$
   
 

Question?

How does the Implied Business Value (I.) compare with what you have actually invested in your business in terms of cash or equivalent amounts invested, current fair market value of plant and equipment, other assets (see your balance sheet to determine this invested amount - essentially it is the Net Tangible Assets excluding any bank or other loans)?

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