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EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
How to calculate EBITDA:

1. EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization

It shows the core operating profitability of a business.

Because it shows how much profit the business generates from operations alone, without the impact of financing or accounting differences.
This makes it easier to compare different businesses fairly.

An EBITDA multiple values a business as a multiple of its EBITDA.
For example:

1. 6× EBITDA means the buyer is paying roughly 6 years’ worth of operating profit as the business value.

Higher multiples usually indicate strong growth, lower risk, or better quality business.

Even in the same industry, valuations differ due to:

1. Growth rate and future potential
2. Profit margins and cash flow stability
3. Customer concentration and risk
4. Strength of management team
5. Level of owner dependency
6. Recurring vs one-time revenue

A revenue multiple values a business based on its sales (revenue).

1. Common in high-growth sectors like tech or startups
2. Usually not preferred for traditional businesses, where profitability matters more

DCF (Discounted Cash Flow) is a valuation method that estimates the value of a business based on its future projected cash flows, adjusted to today’s value using a discount rate.
It is widely used for:

1. Growth-oriented businesses
2. Long-term valuation analysis
3. Investment decision-making

Get a detailed DCF-based valuation for your business — connect with us at: [email protected]

Strong growth, sticky customers, clean books, scalable model, brand moat.

Customer churn, dependency risk, weak margins, poor controls, concentration risk.

Yes, based on diligence findings or performance changes.