VR Business Brokers have correctly valued 100’s of thousands of business since 1979. A professional valuation report that is accurate and comprehensive and will stand up to scrutiny.
Blue Bird Theater - Denver, CO
Four key value factors considered:
- Seller’s Discretionary Earnings (SDE).
- Terms of Sale.
Seller’s Discretionary Earnings:
Re-states the business financials to determine the value of total cash-flow benefiting the owner.
SDE is calculated using the following six categories:
Once these categories are totaled and SDE is developed, a multiplier is applied (1 – 5X or more) considering the business’ performance and the industry.
- Profit or loss as reported.
- Owner’s salary.
- Discretionary expenses.
- Non-recurring expenses.
- Non-cash expenses.
- Expenses not included in the P&L.