Business valuation using multiples (Germany)

Sources and assumptions

Calculation assumptions

• No statutory figure is built in. The base figure, the multiple, the debt, the cash, the asset-based value and the stake are all yours to enter, which is why this page carries no tax year.
• No multiple is supplied. The German Valuation Act accepts, besides an earnings-based approach, any recognised method that buyers customarily use, yet it names no sector multiples, and no public authority publishes any. The figure you enter has to rest on comparable companies or deals you can point to.
• The base figure is used exactly as entered. One-off items, an owner-manager salary out of line with the market, or private expenses should be normalised first, and the multiple must be built on the same definition and period as the figure it is applied to.
• For tax purposes, shares in a German corporation may not be valued below their asset-based value (Substanzwert, section 11(2) of the Valuation Act). If you enter that value, the tool shows whichever of the two amounts is higher and flags a shortfall. It does not work out the asset-based value for you.
• No premiums or discounts are applied: neither the control premium the Valuation Act allows for a controlling block of shares (section 11(3)), nor discounts for minority, marketability or key-person risk. Pension provisions, lease liabilities and non-operating assets are not treated separately.