Business Valuation based on Multiple of Earnings
This example shows how to estimate your business value as multiple of its earnings.
First, you use the recast business financial statements to determine the seller's discretionary cash flow, working capital, and long-term business liabilities. Next, you assess the business overall financial and operational performance and assign values to the 14 key criteria. Finally, you calculate what the business is worth today.
As you identify opportunities to increase business worth and implement your plans, your business value rises. Repeating your business valuation shows just how effective your changes have been - and how much your business worth has grown.
Tools to value a business three ways