When you are preparing to sell your business, you will need a valuation. It is this figure that will determine how much you can reasonably expect to achieve from the transaction, and it should provide a good starting point for negotiations with the buyers.
How do you get an accurate valuation though? Well, the easiest way is to ask a professional M & A consultancy with experience in your business sector to handle it for you. When they do, they will likely use one of the more common companies valuation metrics –the most well-known of which is EBITDA.
What is EBITDA?
EBITDA is an acronym, standing for Earnings Before Interest, Taxes, Depreciation, and Amortization. This is a roundabout way of referring to net profits while taking into account individual asset amortization and depreciation –essentially giving you a figure that is directly related to the profitability of the business.
