Quick and Easy Valuation
An Estimate of Value (for larger companies using EBITDA for earnings metric)
Middle market businesses are typically priced on how much the company makes - it's earnings. The exact metric for earnings is EBITDA. Earnings Before Interest, Taxes, Depreciation and Amortization. Smaller companies with earnings less than $500K use an earnings metric called Seller's Discretionary Earnings (SDE) or just DE.
This module will walk through how to estimate your earnings, then ballpark a "rule-of-thumb" multiple you can use to estimate value.
Supplemental Materials
| Document | Document Type | |
|---|---|---|
| Quick and easy EBITDA template with adjustments. If you are not selling any time soon, you really don't need to identify expense accounts - just use this spreadsheet and estimate adjustments. | Excel | Download |
| Adjustment / addback template with expense categories. | Excel | Download |
| Simple addback example | Excel | Download |
| Quick Valuation Chart | Download |
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