Free tool · 4 minutes
Earn-out scenario calculator
Put in the terms being discussed: the upfront price, yearly targets, the most the earn-out can pay and where payment starts. See the payout year by year under three scenarios you choose.
- Works from
- Only what you enter
- Result
- Indicative, straight away
- Sign up
- None needed
Send the result to an adviser if you want to talk it through
The tool
Synerger · Earn-out scenario calculator
Earn-out period
Between threshold and target
100 means no extra for beating target.
Scenarios, as % of target each year
Total paid to the seller
₹40 cr
Downside · 70%
₹55 cr
Base · 100%
₹58 cr
Upside · 120%
| Scenario | Year 1 | Year 2 | Year 3 | Earn-out |
|---|---|---|---|---|
| Downside0% of maximum | ₹0 crRevenue ₹42 cr | ₹0 crRevenue ₹49 cr | ₹0 crRevenue ₹56 cr | ₹0 cr |
| Base100% of maximum | ₹5 crRevenue ₹60 cr | ₹5 crRevenue ₹70 cr | ₹5 crRevenue ₹80 cr | ₹15 cr |
| Upside120% of maximum | ₹6 crRevenue ₹72 cr | ₹6 crRevenue ₹84 cr | ₹6 crRevenue ₹96 cr | ₹18 cr |
Indicative, based only on what you enter. Agree the definitions with your CA and lawyer.
How it works
What is behind the result.
How payouts are worked out
For each year, the achieved figure is compared with the target. Below the threshold nothing is paid. Between the threshold and the target, the payout rises in a straight line, or pays in full only at target if you choose all or nothing. Above target, the payout can rise further up to the cap you set.
What the scenarios are
Each scenario is a percentage of target, such as 70, 100 and 120 percent, applied to every year. Change them to test the outcomes you think are realistic.
What it leaves out
Tax, the time value of money, catch up clauses, accounting definitions and disputes are not modelled.
Next step
Tell us what you are planning. We will tell you how we would run it.
A thirty minute confidential call with an adviser. You leave with the steps, the documents you will need and where the risks usually sit.