AI Blocks › Handle money and investing
Owner earnings calculator
Paste a company's profit, depreciation and spending. Get the cash an owner could take out each year, as a range.
Owner earnings calculator is a free AI skill for the job "Handle money and investing". Give the instructions to an AI assistant that supports the required files and tools, then review its output.
Free · No account · Made by AI Blocks · Level: advanced
What it does
Profit is an opinion built from accounting rules. Plain cash flow is worse, because it adds back depreciation and forgets that the machines, shops or systems have to be replaced. A business can show growing profit and still hand its owners almost nothing. This skill works out owner earnings: profit, plus non-cash charges, minus the spending needed to stay where you are, minus the extra money tied up as sales grow. Because nobody knows next year's spending, it gives a range, with the three ways it estimated the spending to stay level. It also shows the trend and flags businesses that keep eating cash. It gives no buy or sell calls and marks every missing figure.
You give it
- Four or five years of profit after tax, depreciation, capital spending and working capital lines
- Earlier findings on the business (optional)
- A line on what the business does (optional)
You get
- A year-by-year table with one-off items removed
- Low, middle and high owner earnings
- How much of reported profit survives as owner earnings
- The yearly growth and how steady it is
- A note where the method does not fit
Use it when
- You are about to value a business and the profit figure may hide how much cash it eats.
- A company shows rising profit but the owners never seem to get any money.
- You want one cash figure to feed into a value calculation.
How to use it
- Start a chat with the skill. Open it if you added it to your AI, or copy it and paste it in.
- Paste the figures from the company's accounts, or attach the spreadsheet.
- Say what you know about one-off items, such as a building sale.
- Read the three figures and the ratio to profit before you use any of them.
- Take the working figure and the range to "Business value range calculator".
Workflows that use it
- Value a business and the discount to ask for
- Find out if a business is worth owning long term
- Check a small business before you buy it