Adjusted EBITDA or EBITDA? – Part 3 of 3

Now that you can calculate EBITDA correctly it is time to drill down into the difference between Adjusted EBITDA and EBITDA.  Before we review this important distinction, I think it is important to explain the reason for using another benchmark for valuation. If you classify businesses as small, medium or large, breaking them up into [...]

By |2017-12-18T23:06:07-07:00December 18th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? – Part 3 of 3

Adjusted EBITDA or EBITDA? – Part 2 of 3

Now that we have a good baseline Earnings number we need to look at Interest, Taxes, Depreciation, and Amortization. Interest Expense. The interest you can add back is all interest from debts and credit cards and consumer debts. It also can include finance charges. What interest does not include is bank fees, charges, or merchant [...]

By |2017-12-15T15:34:44-07:00December 15th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? – Part 2 of 3

Adjusted EBITDA or EBITDA? Part 1 of 3

There is a lot of discussion in the M&A world about EBITDA and a wide variety of opinions about what is included and what is not included.  Because of this, many advisors, sellers, and buyers are using an “adjusted” EBITDA figure for sales transactions.  How do EBITDA and “adjusted” EBITDA differ?  This is part 1 [...]

By |2017-12-14T11:50:44-07:00December 14th, 2017|Business Valuation Expert Tips and Information|Comments Off on Adjusted EBITDA or EBITDA? Part 1 of 3

Working Capital: An Important Consideration When Selling A Business

Working Capital is defined simply as Current Assets Less Current Liabilities. Some advisors will include a certain amount of average inventory in Working Capital as well. Some advisors do not include Inventory in the Working Capital. Because of this it is important to define Working Capital as it pertains to each individual deal. Inventory can [...]

By |2017-12-11T18:44:22-07:00December 11th, 2017|Uncategorized|Comments Off on Working Capital: An Important Consideration When Selling A Business

What is Fair Market Value anyhow?

When determining the value of a business there are many terms which can be confusing.  The term most often used if Fair Market Value and is defined as: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller [...]

By |2018-03-14T16:35:50-06:00December 1st, 2017|Business Valuation Expert Tips and Information|Comments Off on What is Fair Market Value anyhow?