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 Rapid Growth Business in 2026: Forward EBITDA and Rule of 40
Valuing a rapid growth business in 2026 shifts from TTM EBITDA to forward EBITDA methodology and Rule of 40 framing (growth rate plus EBITDA margin). 30%+ growth with Rule of 40 above 40 commands premium multiples: 10-15x forward EBITDA for services, 8-15x ARR for SaaS. 15-30% growth with positive EBITDA lands 5-8x forward EBITDA. Sub-15% […]
Quality of Earnings: What Buyers Need to Know
Quality of Earnings: What Buyers Need to Know Quick Answer A buy-side quality of earnings review is the financial diligence work a buyer commissions to validate the seller-quoted EBITDA before signing definitive documents. The QoE provider rebuilds the target’s trailing twelve-month earnings from the general ledger, tests revenue recognition cohort by cohort, normalizes working capital, […]
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 in 2026: 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 (TTM) in M&A in 2026: Why Buyers Price Off TTM, Seasonality, QoE
Trailing twelve months TTM in M&A is the pricing metric buyers use because it captures the most recent 12 months of business performance regardless of fiscal year timing. Buyers price off TTM EBITDA because it eliminates the stale-fiscal-year problem (a business that’s been growing 20% would look artificially small using last completed fiscal year). Seasonality […]
Revenue Multiples vs EBITDA Multiples in 2026: Which Buyers Actually Use, With a Worked HVAC Example
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 […]