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Terminal Value using Exit Multiple Method Formula

GoTerminal Value using Perpetuity Method Formula

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Terminal Value represents the value of a project or investment at the end of a specific period, typically when explicit cash flow projections end. Check FAQs

TV = EBITDA n+1 \cdot EM

TV - Terminal Value?EBITDA_n+1 - EBITDA at Last Period?EM - Exit Multiple?

Terminal Value using Exit Multiple Method Example

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With units

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Here is how the Terminal Value using Exit Multiple Method equation looks like with Values.

Here is how the Terminal Value using Exit Multiple Method equation looks like with Units.

Here is how the Terminal Value using Exit Multiple Method equation looks like.

10150 = 1015 \cdot 10

10150 = 1015 \cdot 10

10150 = 1015 \cdot 10

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Terminal Value using Exit Multiple Method Solution

Follow our step by step solution on how to calculate Terminal Value using Exit Multiple Method?

FIRST Step Consider the formula

TV = EBITDA n+1 \cdot EM

Next Step Substitute values of Variables

∴

TV = 1015 \cdot 10

Next Step Prepare to Evaluate

∴

TV = 1015 \cdot 10

LAST Step Evaluate

∴

TV = 10150

Terminal Value using Exit Multiple Method Formula Elements

Variables

Terminal Value

Terminal Value represents the value of a project or investment at the end of a specific period, typically when explicit cash flow projections end.

Symbol: TV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Terminal Value

EBITDA at Last Period

EBITDA at Last Period refers to the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) figure for the most recent financial reporting period.

Symbol: EBITDA_n+1

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find EBITDA at Last Period

Exit Multiple

Exit Multiple is a valuation metric used in finance to estimate the value of a company or an asset at the end of a certain period.

Symbol: EM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Exit Multiple

Other Formulas to find Terminal Value

Go Terminal Value using Perpetuity Method

TV = \frac{FCF}{DR - g}

Other formulas in Capital Budgeting category

Go Payback Period

PBP = \frac{Initial Invt}{C f}

Go Cost of Retained Earnings

C RE = (\frac{D}{P c}) + g

Go Cost of Debt

R d = Int.E \cdot (1 - T r)

Go After-Tax Cost of Debt

ATCD = (R f + CS P) \cdot (1 - T r)

How to Evaluate Terminal Value using Exit Multiple Method?

Terminal Value using Exit Multiple Method evaluator uses Terminal Value = EBITDA at Last Period*Exit Multiple to evaluate the Terminal Value, The Terminal Value using Exit Multiple Method formula is defined as the present value of all future cash flows of a business or an investment beyond a certain point in the future. Terminal Value is denoted by TV symbol.

How to evaluate Terminal Value using Exit Multiple Method using this online evaluator? To use this online evaluator for Terminal Value using Exit Multiple Method, enter EBITDA at Last Period (EBITDA_n+1) & Exit Multiple (EM) and hit the calculate button.

FAQs on Terminal Value using Exit Multiple Method

What is the formula to find Terminal Value using Exit Multiple Method?

The formula of Terminal Value using Exit Multiple Method is expressed as Terminal Value = EBITDA at Last Period*Exit Multiple. Here is an example- 10150 = 1015*10.

How to calculate Terminal Value using Exit Multiple Method?

With EBITDA at Last Period (EBITDA_n+1) & Exit Multiple (EM) we can find Terminal Value using Exit Multiple Method using the formula - Terminal Value = EBITDA at Last Period*Exit Multiple.

What are the other ways to Calculate Terminal Value?

Here are the different ways to Calculate Terminal Value-

Terminal Value=Free Cash Flow/(Discount Rate-Growth Rate)

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Terminal Value using Exit Multiple Method Formula

​GoTerminal Value using Perpetuity Method Formula

Terminal Value using Exit Multiple Method Example

Terminal Value using Exit Multiple Method Solution

Terminal Value using Exit Multiple Method Formula Elements

Other Formulas to find Terminal Value

Other formulas in Capital Budgeting category

How to Evaluate Terminal Value using Exit Multiple Method?

FAQs on Terminal Value using Exit Multiple Method

Variable Name

GoTerminal Value using Perpetuity Method Formula