Unlock the SDE vs EBITDA Business Valuation Formula
We cut through the noise so founders can pick the metric that fits their exit path. This short guide clarifies what each measure captures and when each one matters. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It gives a clean view of operating cash flow for financial buyers. SDE reflects the total […]
How to Calculate Working Capital When Selling a Business
We guide founder-led owners through the financial details that shape final proceeds. Understanding working capital is not optional. It affects the purchase price and the buyer’s confidence in the deal. Too many sellers leave this issue until the last minute. That can derail the entire sale process. We help owners set a clear target, align […]
How to Value a Business with Rapid Growth
How to Value a Business with Rapid Growth Quick Answer High-growth businesses typically command valuations of 4x to 8x SDE or 6x to 12x EBITDA, significantly higher than slower-growth peers, because buyers pay primarily for future cash flow predictability rather than current earnings. Valuation hinges on three factors: the durability and repeatability of growth, the […]
Quality of Earnings: What Buyers Need to Know
Quality of Earnings: What Buyers Need to Know Quick Answer Quality of Earnings is a financial review that validates a company’s true earning power by stripping out one-time gains, accounting adjustments, and non-recurring items to show buyers reliable EBITDA and sustainable cash flow. This analysis typically costs between 35,000 and 150,000 dollars depending on complexity […]
Valuation Multiples: Unlocking the Key to Business Valuation
Valuation Multiples: Unlocking the Key to Business Valuation Quick Answer Valuation multiples are ratios that link a company’s enterprise value to a financial metric like EBITDA, revenue, or earnings, enabling fast market-based comparisons across similar businesses. The most common multiples are EV/EBITDA, EV/Revenue, and P/E ratio, with EV/EBITDA favored for founder-owned businesses because it normalizes […]
Accountant vs M&A Advisor: Why They Value Your Business Differently
Accountants apply book value and asset-based methods; M&A advisors apply market multiples and DCF. Why the same business gets 2 different numbers and which one buyers actually care about.
Trailing Twelve Months: The Metric That Matters Most for M&A
Trailing Twelve Months: The Metric That Matters Most for M&A Quick Answer Trailing Twelve Months (TTM) is a rolling twelve-month snapshot of a company’s most recent revenue and earnings, updated each quarter to avoid relying on stale annual financial statements. Unlike fixed fiscal year reports that can be up to a year out of date, […]
Revenue Multiples vs EBITDA Multiples: Which One Buyers Actually Use
When buyers use revenue multiples vs EBITDA multiples (and which gets you a better price). Industry-by-industry breakdown — and why most LMM buyers default to EBITDA.
How Private Equity Evaluates Small Businesses Behind Closed Doors
How Private Equity Evaluates Small Businesses Behind Closed Doors Quick Answer Private equity firms evaluate small businesses using a multi-factor assessment that includes financial health, management team quality, market position, and growth potential. They analyze cash flow stability, competitive advantages, scalability, and the strength of the owner/management structure to determine return prospects. This evaluation happens […]