The majority of company valuations today are based on multiples of revenues or EBITDA.Using the following data
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The majority of company valuations today are based on multiples of revenues or EBITDA.Using the following data please state the company valuation for each of the scenarios below.[SaaS Revenue 4x multiple: Tech Enabled Service Revenue 1.5x multiple: Maintenance Revenue 2x multiple: Traditional Service Revenue 1x multiple: Positive EBITDA 15x multiple.]
- Company A has a mix of Tech Enabled and Traditional Service.The Tech Enabled Services total $4,000,000.00 annually and the Traditional Service totals $1,500,000.00.
- If the same company in “1” above had annual EBITDA of $750,000.00, which would be the better valuation?
- Company B has high growth SaaS revenue of $10,000,000.00 and Maintenance Revenue of $4,500,000.00.It also has annual operating EBITDA of -$350,000.00.Based on these facts would an offer of $31,000,000.00 for the company be acceptable?Please explain your answer.
- Company C is a pure Traditional Services company with $3,500,000.00 in annual revenue but $1,000,000.00 in EBITDA.Based on this should the owner accept a lower than standard 10x EBITDA multiple or $10,000,000.00?Please explain your answer.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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