Enter all but one of the revenue, price-to-revenue ratio, industry average price-to-revenue ratio, and total number of apps in the market into the calculator to determine the valuation of the app. This calculator can also evaluate any of the variables given the others are known.

## App Valuation Formula

The following formula is used to calculate the valuation of an app:

 Valuation = (R * P) / (I * T)

Variables:

• Valuation is the estimated value of the app
• R is the revenue generated by the app
• P is the price-to-revenue ratio
• I is the industry average price-to-revenue ratio
• T is the total number of apps in the market

To calculate the valuation of an app, multiply the revenue generated by the app by the price-to-revenue ratio. Divide the result by the industry average price-to-revenue ratio multiplied by the total number of apps in the market.

## What is a App Valuation?

App valuation is a process that determines the worth or value of a mobile application. This process is crucial for developers, investors, and businesses who are interested in buying, selling, or investing in an app. The valuation is based on several factors including the app’s current and potential revenue, the size and engagement level of its user base, its ranking in app stores, the quality of its technology and design, and its competitive position in the market. Other factors such as the app’s growth rate, the financial health of the company that owns it, and broader market trends can also influence the valuation. The goal of app valuation is to arrive at a fair price that reflects the app’s true value and potential for future success.

## How to Calculate App Valuation?

The following steps outline how to calculate the App Valuation.

1. First, determine the projected revenue generated by the app ($). 2. Next, determine the projected expenses associated with the app ($).
3. Next, gather the formula from above = App Valuation = Revenue – Expenses.
4. Finally, calculate the App Valuation.
5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem :

Use the following variables as an example problem to test your knowledge.

Projected revenue ($) = 5000 Projected expenses ($) = 2000