How do you calculate equity multiple?

Add up every distribution, including sale proceeds, and divide by the equity invested.

What is a good equity multiple?

It depends on the hold period and the risk. A multiple only means something next to its timeline, so read it with IRR.

What is the difference between equity multiple and IRR?

Equity multiple measures total money back and ignores time. IRR is an annualized rate that rewards getting money back sooner.

Can an equity multiple be below 1?

Yes. Below 1.00x means investors got back less than they put in.

Free tool and guide

Equity multiple calculator with IRR, from your cash flows

Equity multiple says how much you made. IRR says how fast. Enter equity, annual cash flows and sale proceeds below to see both.

Use the Equity multiple and IRR calculator Read the guide

The equity multiple is total distributions divided by the equity invested. If you invest $3,200,000 and get back $5,250,000 over the hold, the equity multiple is about 1.64x. It says nothing about time, which is why it is read with IRR.

Equity multiple and IRR calculator

Enter equity, one cash flow per year, and the net sale proceeds to get the equity multiple, IRR and profit. It runs in your browser: your numbers are not uploaded, saved or tracked, and there is no sign-up.

Showing invented example numbers

Equity multiple: 1.64x; Total distributions divided by equity
IRR: 11.1%; Assumes one cash flow at each year end
Total distributions: $5,250,000
Profit: $2,050,000
Hold period: 5 years

Arithmetic only, with no market benchmarks. This is not a loan quote or advice.

The formulas

Equity multiple = total distributions / equity invested. IRR is the annual rate at which the net present value of all the cash flows, including the initial investment, equals zero. This calculator assumes one cash flow at each year end, with the sale in the final year.

A worked example

Invest $3,200,000. Receive $130,000 in year one, rising by $10,000 a year for five years, plus $4,500,000 of net sale proceeds in year five. Distributions total $5,250,000, an equity multiple of 1.64x and an IRR of 11.1%.

Why read them together

Both can flatter a deal alone. A 2.0x equity multiple over 15 years is a modest IRR, while a high IRR on a quick flip may produce few dollars. Compare your own numbers by changing the years in the calculator, keeping the total the same, and watching IRR move.

What to check in anyone's projection

Gross or net. A sponsor's headline can be before fees and promote. Ask for the investor's net figures.
The exit. Sale proceeds usually drive the result, and depend on an assumed exit cap rate. Test it with the cap rate calculator.
Timing. Real cash flows are monthly or quarterly, and capital calls can come later. Year-end flows are a simplification.
More than one IRR. If a deal has big negative flows later, the math can produce more than one answer. Read IRR with care in those cases.

Frequently asked

How do you calculate equity multiple?: Add up every distribution, including sale proceeds, and divide by the equity invested.
What is a good equity multiple?: It depends on the hold period and the risk. A multiple only means something next to its timeline, so read it with IRR.
What is the difference between equity multiple and IRR?: Equity multiple measures total money back and ignores time. IRR is an annualized rate that rewards getting money back sooner.
Can an equity multiple be below 1?: Yes. Below 1.00x means investors got back less than they put in.

Pacific Software Ventures built this tool and guide, and sells AI consulting and training to commercial real estate firms. This is general education, not investment, legal or tax advice.

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