Author Archives: Thomas Cremona

While a company’s valuation often grabs the headlines, many business owners overlook the importance of contract terms—arguably just as crucial, if not more so. It’s essential to pay close attention to earn-out clauses, the potential loss of transferred clients, and other factors typically included in a business transfer agreement.

Valuing a company through a revenue multiple is rarely used, though you will come across it, and from experience it has primarily arisen in accountancy practices. I always find that a curiosity that whilst accountants created a number of valuation methodologies for various industries they often utilise a revenue multiple when valuing their own firms.Continue reading “Revenue multiple valuation”

When discussing valuations you will routinely come across the term “fair value” which is defined as…

A valuation method you will often come across is the EBITDA multiple valuation. It is often used as a benchmark number, though be wary of using it, as no two companies are the same, and thus one needs to take a more in-depth look into the business to reach a more precise valuation.

In many businesses, the owner-manager is often either underpaid or overpaid, so adjustments to EBITDA may be necessary to reflect the business’ true earning potential.

A valuation may reference the ‘Seller’s Discretionary Earnings (SDE),’ which is often utilised in small to mid-market company valuations where the owner’s income and personal expenses may materially affect the financial results.🛩 🥐 ⛵

Ever wondered where to start from when analysing a company’s value, check its Net Asset Value, and continue working from there 🎯