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ARR Valuation Sensitivity Calculator
Estimate valuation sensitivity to ARR and revenue multiple assumptions (simple 3x3 grid).
ARR multiple valuation is fast: enterprise value ~ ARR x multiple. But both ARR and multiples move with market conditions, pricing, and retention.
A small sensitivity grid helps you see how fragile (or robust) the valuation is to reasonable changes in ARR and the multiple.
Prefer an explanation- Read the guide.
ARR valuation sensitivity: a simple multiple grid for scenariosARR growth rate: how to measure recurring momentumARR guide: meaning, formula, MRR, bookings, and growthARR vs MRR: definitions, formulas, and how to convert
$
Uses +/- step around ARR base to create a 3x3 grid.
%
Uses +/- step around the multiple base to create a 3x3 grid.
Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$14,400,000.00
- Base ARR
- $2,400,000
- ARR step
- 15%
- Base multiple
- 6
- Multiple step
- 1
How to calculate
- Enter your base ARR and base multiple.
- Choose step sizes for ARR and the multiple (+/- around the base).
- Review the 3x3 grid of valuations.
Formula
Enterprise value ~ ARR x multiple; Sensitivity varies ARR and multiple around a base case
- This is a heuristic. Real valuation depends on growth, margin, retention, and market conditions.
- Uses enterprise value (EV) as ARR x multiple (simplified).
- Only shows a small grid; use broader scenarios for full planning.
FAQ
Is this a full valuation model-
No. This is a multiple-based heuristic. For deeper analysis, use DCF or a comps model that reflects retention, growth, margin, and risk.
Why sensitivity on ARR as well as multiple-
ARR can change with pricing, churn, and mix. The multiple can change with market conditions and your growth/retention profile. Both move in practice.
Common mistakes
- Treating a single multiple as precise (false precision).
- Using inconsistent ARR definitions (including one-time items).
- Ignoring retention and margin (multiples depend on quality).
How to interpret
How to use ARR valuation sensitivity
- Treat the grid as a scenario range, not a precise estimate.
- Pair valuation scenarios with unit economics (payback, burn multiple) to ensure growth is sustainable.
- Use a clean ARR definition (recurring only) to avoid inflating the base case.
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Quick checks
- Keep time units consistent (monthly vs annual) across inputs and outputs.
- Segment by cohort/channel/plan before trusting a blended average.
- Use the related guide to avoid common definition and denominator mismatches.