What the model calculates
The calculator divides the purchase price between buyer equity and acquisition debt, calculates an amortizing annual loan payment, grows normalized owner earnings, and estimates exit value from the final year’s earnings. Net exit proceeds subtract any remaining modeled loan balance.
MOIC shows total modeled cash returned relative to initial equity. IRR also considers when annual cash flows arrive. Debt can increase equity returns, but it can also create negative cash flow and default risk when earnings underperform.
How the three scenarios differ
The downside case reduces starting earnings, lowers growth by ten percentage points, and reduces the exit multiple. The upside case raises those assumptions by the same framework. These are sensitivity cases, not probability-weighted forecasts. Replace them with evidence from retention, concentration, pipeline, operating costs, and transferability.
Inputs the calculator does not know
A real offer must account for cash, debt-like liabilities, deferred revenue, working capital, transaction costs, taxes, capital expenditure, remediation, seller notes, earn-outs, and escrow. It must also verify that code, contracts, data rights, domains, vendor accounts, and customer relationships transfer.
Start with the buyer due-diligence guide and use the model only after normalizing the underlying earnings.