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By The Numbers

EBITDA and the Multiple
By The NumbersCurrent Issue

EBITDA and the Multiple

In my last article, I defined EBITDA as net profit adjusted to make it more useful for business valuation. To estimate a company’s value, valuers multiply EBITDA by a number called the “multiple.” The result is the estimated value of the company. For example, a company with an annual EBITDA of $500,000 and a multiple of 2 has a value of $1 million.
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By The Numbers

EBITDA

There are conventional practices for valuing a business that informed buyers and sellers generally follow. One of those is valuing a business as a multiple of its net annual profit expressed in a form called EBITDA.
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Cash and Profit
By The Numbers

Available Cash

“I make money, so why don’t I have any?” Anyone who has been in business for a significant time has asked that question, usually in response to a cash crisis such as the inability to make payroll. 
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Breakeven
By The Numbers

Breakeven

Breakeven is too important to ignore. There are many uses for breakeven. It is a fundamentally important tool with the power to transform your thinking and the quality of your business decisions.
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numbers
By The Numbers

Financial Literacy

None of us became business owners so we could keep books and read financial statements. Nevertheless, both are critical to running a successful business. We can’t even approach our full potential without them. 
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