Bizval Indicator Report
for June 2025
We like to think of the Bizval Indicator as a ‘barometer’ of SME valuation multiples providing a perspective of the value of Australian small-to-medium sized businesses.
Unlike listed companies, the sale prices of SME’s are not readily available. The Bizval Indicator helps monitor movements in the drivers of SME values.
The Bizval Indicator is derived from key drivers of SME values and is then reviewed in the context of a basket of general economic indicators.
Bizval Indicator
| NOW | 1 YEAR AGO | MOVEMENT |
|---|---|---|
| 363 | 339 | 7.1% |
Source: Bizval, 30 June 2025.
Bizval Indicator rebounds to close out the financial year.
The Bizval Indicator jumped 7.1% on a yearly basis in the June quarter, closing out the financial year with a reading of 363.
On a quarterly basis this represents a significant increase from the March quarter’s indicator of 302, an increase of 20.1%
The strongest influence on the BIR this quarter was a sharp rebound in Price Earnings (P/E) ratios of small cap listed companies.
This was followed closely with a decrease in the number of businesses listed for sale, which according to our internal research shows a reduction of 3.3% over the past year. If we dig a little deeper and extend this to a two-year period, there are now 9.8% less businesses listed for sale than that of June 2023.
Businesses from the Financial Services, Construction and Professional Services industries were the featured predominantly in our own valuations over the June quarter.
General Economic Indicators
| INDICATOR | NOW | 1 YEAR AGO | MOVEMENT |
|---|---|---|---|
| All Ordinaries Index AU (1) | 8,773 | 8,014 | 9.47% |
| RBA Cash Rate AU (2) | 3.85% | 4.35% | -0.50% |
| GDP AU (3) | 1.30% | 1.10% | 0.20% |
| Dow Jones Industrial Average USA (4) | 44,095 | 39,119 | 12.72% |
| Inflation Rate AU (5) | 2.40% | 3.60% | -1.20% |
| Unemployment Rate AU (6) | 4.10% | 4.00% | 0.10% |
(1) Source: Australian Stock Exchange, 30 June 2025
(2) Source: Reserve Bank of Australia, 21 May 2025
(3) Source: Australian Bureau of Statistics, 31 March 2025 (seasonally adjusted, yearly)
(4) Source: New York Stock Exchange, 30 June 2025
(5) Source: Australian Bureau of Statistics, 31 March 2025 (headline, yearly)
(6) Source: Australian Bureau of Statistics, 19 June 2025
Unemployment Rate
The seasonally adjusted unemployment rate remained at 4.1% in May, according to data released on 19 June 2025 by the Australian Bureau of Statistics (ABS).
Sean Crick, ABS Head of Labour Statistics, said: ‘Despite employment falling by 2,000 people this month, it’s up 2.3% compared to May 2024, which is stronger than the pre-pandemic, 10-year average annual growth of 1.7%.’
‘This fall in employment, combined with a drop in unemployment of 3,000 people, meant that the unemployment rate remained steady at 4.1% for May,’
(Source: ABS)
RBA Cash Rate
At its meeting on 20 May 2025, the Board decided to lower the cash rate by 25 basis points to 3.85%.
Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. Data on inflation for the March quarter provided further evidence that inflation continues to ease.
Uncertainty in the world economy has increased over the past three months and volatility in financial markets rose sharply for a time. While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries.
Geopolitical uncertainties also remain pronounced. These developments are expected to have an adverse effect on global economic activity, particularly if households and firms delay expenditure pending greater clarity on the outlook.
(Source: RBA)
Drivers of SME Values
The Bizval Indicator is calculated using a proprietary formula. We research, monitor and evaluate the following components to arrive at the result.
ASX Small Cap P/E Ratios
Small Capitalisation companies have greater similarities to private SMEs than large cap stocks. Bizval reviews the mean and median price earnings (P/E) ratios of companies with market capitalization of between $20 million and $200 million. We adjust these figures to align them more closely with private SMEs by reducing the P/E ratios to account for differences in size, key-person dependence and ability to easily buy or sell (liquidity).
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Business Loan Interest Rates
Bizval monitors the advertised interest rates of Australian major banks for business loans. Using an average of these rates we then add a risk margin (commonly added to the base rate by banks when lending to small businesses). We also add a hypothetical margin for the SME proprietor to reflect their return on investment. This interest rate is then converted to a multiple.
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Businesses for Sale
Bizval undertakes a review of the volume of businesses listed for sale across Australia, taking into account any movements in this number.
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Bizval Multiples
We review an average of the multiples used in our business valuations and combine these with multiples from actual business sales (where available).
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In addition to the four drivers of SME values, the Bizval Indicator is evaluated in the context of six national / international General Economic Indicators.
The All Ordinaries Index (Australian Stock Exchange)
The ‘All Ords’ is the oldest index of shares in Australia, dating from 1980. It is derived from the share prices of 500 of the largest companies listed on the Australian Securities Exchange (ASX).
Reserve Bank of Australia Cash Rate
The RBA sets the target ‘cash rate’, which is the market interest rate on overnight funds. It uses this as the instrument for monetary policy, and influences the cash rate through its financial market operations.
Gross Domestic Product (Australia)
GDP is a monetary measure of the market value of all final goods and services produced over a defined period of time.
Dow Jones Industrial Average (USA)
The ‘Dow’ is a US stock market price-weighted index monitoring the share trading performance of 30 large, publicly owned American-based companies.
Inflation Rate (Australia)
The Consumer Price Index (CPI) measures the average change over time in the prices paid by Australian households for a fixed basket of goods and services.
Unemployment Rate (Australia)
The proportion of unemployed persons in the labor force is seasonally adjusted to take account of changes in demand for agricultural labor, students seeking employment after completing education, and so on.
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An independent business valuation compiled by a professional can help. Contact BIZVAL or order your business valuation today.