Working capital is a critical yet often misunderstood component of business sale transactions. It plays a central role in determining the true price a buyer will pay and a seller will ultimately receive. This article explores how working capital requirements affect business valuations and deal structures. We will examine how target working capital is calculated, […]
Executive Summary: Understanding and applying industry-specific valuation multiples is fundamental to accurately assessing the value of a small business. While metrics like EBITDA and Seller’s Discretionary Earnings (SDE) are commonly used in private company valuations, the appropriate multiple can vary significantly depending on the industry. In this article, we explain how these multiples are derived, […]
One of the principal tasks a small business owner must complete often and accurately is business valuation. Yet, for many small business owners, “business valuation” is a loaded phrase, and one to avoid. Frequently, however, this aversion to business valuation is a result of a fundamental misunderstanding. (Keep reading to understand the Definition and Meaning […]