Business Valuations – Understanding
Business owners don’t always understand how business valuations are performed, and they oftentimes don’t agree with the number. They first need to understand how their company’s cash flow is computed. It starts with determining the “Add Backs” — expenses that are added to the profits to derive EBITDA (earnings before interest, taxes, depreciation and amortization) or SDE (Sellers Discretionary Earnings – used for smaller businesses).
Find out more: “What Add Backs Are Legitimate in an M&A Deal?”