Enter the asking price, income, operating expenses, buyer cash contribution, and financing terms.
How the analysis works.
Indevest turns the numbers you enter into answers about operating performance, loan coverage, buyer cash flow, return, price context, and missing information.
The calculation flow
From asking price and financial details to buyer answers
Income minus operating expenses produces operating earnings before acquisition financing.
The asking price, contribution, interest rate, and term determine the proposed loan and debt payments.
Operating earnings minus debt payments produces buyer cash flow before estimated tax.
The tax assumption produces after-estimated-tax cash flow, and each supported result is compared with your requirements.
One result can pass while another misses
How buyer requirements work
Suppose you require at least $4,000 in monthly after-estimated-tax cash flow and 1.25x debt coverage. A result of $4,300 and 1.30x meets both requirements. A result of $3,700 creates a $300 monthly shortfall even when debt coverage meets its target.
Indevest shows each result separately, the difference from your requirement, missing information, and what to review next.
What affects the result
The source and purpose of each number stay distinct
Reported financials and buyer assumptions
Seller-reported history, buyer adjustments, and projections stay separate so you can see which case produced the result.
Missing information
Unknown purchase costs or unsupported figures remain visible instead of being treated as zero.
Earnings compatibility
Seller and buyer amounts are compared only on the same annual measure: SDE with SDE, EBITDA with EBITDA, or NOI with NOI. Missing or different measures cannot produce a same-measure difference.
Financing and additional cash
The entered contribution affects the proposed loan. Inventory, equipment, repairs, real estate, and working capital remain separate purchase cash.
Price references
Indicative Valuation, comparison-yield capital, and the financing-sensitive purchase benchmark remain separate because they answer different questions.
How valuation assumptions become an estimate
The selected valuation method uses its matching annual financial measure and your multiple or capitalization-rate assumptions. Seller-reported and buyer-adjusted figures keep their source labels. Review the method, source and base assumption before comparing the estimate with the asking price.
Definitions and calculations
Formula reference
Open this reference when you need the exact calculation.
View all 14 formulas
| Metric | Formula | What it means |
|---|---|---|
| Monthly gross income | Explicit monthly gross income, otherwise annual gross income / 12 | The monthly income basis used by the current operating calculation. |
| Monthly operating earnings | Monthly gross income - monthly operating expenses | Operating earnings before acquisition financing and modeled tax; NOI for income real estate. |
| Annual operating earnings | Monthly operating earnings x 12 | Annualized operating evidence used by yield and coverage metrics. |
| Loan principal | max(asking price - entered cash contribution, 0) | The current acquisition-financing principal under the entered assumptions. |
| Monthly debt service | Standard amortizing payment from principal, annual interest rate / 12, and amortization years x 12 | Zero when loan principal is zero. |
| Before-estimated-tax cash flow | Monthly operating earnings - monthly debt service | Buyer cash flow after financing and before the modeled tax estimate. |
| Estimated monthly tax | max(0, before-estimated-tax cash flow x entered tax rate) | The model does not create an estimated tax benefit when monthly cash flow is negative. |
| After-estimated-tax cash flow (NIAT) | Before-estimated-tax cash flow - estimated monthly tax | Monthly buyer cash flow after financing and the modeled tax estimate. |
| Operating Earnings Yield / CAP Rate | Annual operating earnings / asking price | Before-financing operating yield; CAP Rate is the income-real-estate label. |
| Price-to-Revenue Multiple / GIM | Asking price / annual gross income | Price relative to top-line income; GIM is the income-real-estate label. |
| Monthly Income-to-Price Ratio | Monthly gross income / asking price | The compact product label for the 1% Rule ratio. |
| Cash on Cash | Annual before-estimated-tax cash flow / entered cash contribution | Additional acquisition cash is reconciled separately and does not silently change this denominator. |
| After-tax Cash on Cash | Annual after-estimated-tax cash flow / entered cash contribution | The corresponding ratio after the modeled tax estimate. |
| Actual DSCR | Annual operating earnings / annual debt service | Not applicable when there is no debt; Required DSCR is a separate buyer target. |