Calculate The Company Value
Adjusted EBITDA and Valuation Calculation (see page 54 of The Exit Strategy Handbook)
EBITDA
Additions:
Legal, reorganization, audit and appraisal costs to prepare for the sale of the business.
Salaries of family members who are not expected to continue working for the buyer
One-time bonuses paid for a nonrecurring and unusual transaction
Legal and other costs to buy out minority owners of the company
Country club fees and season tickets to the Chicago Cubs
Vehicles, education and other expenses for three family members
Officer life and disability insurance that will not continue after the sale
Total Additions
Deductions:
Increase in the cost of the person that will replace the owner/manager
Rent paid to the owner below market value for an equivalent building
Below-market salaries paid to key employees that are expected to continue with the buyer
Total Deductions
Adjusted EBITDA
Multiplier
X
X
X
X
X
Estimated value
Difference
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