Are you asking yourself… How Much Is My Manufacturing Company Worth in Naperville IL? If you are a manufacturing business owner looking to sell your company, you’ll likely have a dozen question regarding the value of your company.
No doubt, there is a lot to consider when selling a business, take a look at the below to focus on finding your staffing company value.
Good buyers focus on the potential earnings from your business and the future risks to achieve that stream of income.
So, what exactly are earnings? The most common measure is EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization.
Because a buyer may have a different tax rate and a different capital structure, they exclude your unique tax rate and interest payments. Similarly, depreciation and amortization are non-cash expenses, and companies may have varying accounting policies regarding how items are depreciated or amortized, so buyers typically look at earnings before these non-cash expenses.
EBITDA is an attempt to measure cash flow from the business on an apples-to-apples basis
In order to calculate EBITDA, start with your net income before corporate taxes, add back your interest expense, depreciation, and amortization, if any, to arrive at EBITDA.
Look at the table below and multiply your Adjusted EBITDA by the respective EBITDA multiple given your industry and EBITDA size. For example, if you own a healthcare company with $1 million in EBITDA, multiply it by 5.5x and the valuation is $5.5 million.
A complete or formal valuation will include other analysis and computations, but this provides a quick (and dirty as we say) value range for your company.
|EBITDA Multiples by Industry & EBITDA Size|
|Industry||$0 – $1M||$2 – $5M||$6 – $10M|
|Media & Entertainment||n/a||5.0x||7.5x|
Valuing your business is a very complex process involving a host of factors, Transact Capital Partners would be glad to sit down with you to discuss the value of your business and the best time to exit if that is on the horizon.
Our team is headquartered in Richmond, VA, and we have representatives in Lexington, KY, Pennsylvania, Roanoke, VA, and Virginia Beach. We maintain strict confidentiality and absolutely no future obligation to engage our services.