Valuation Concepts
7 articles
Enterprise Value (EV)
EV represents the worth of the trading operations irrespective of capital structure (equity + debt cash). Buyers apply sectorspecific EV multiplescommonly EV/EB…
Equity Value
Equity value is the price paid to shareholders and is calculated as EV minus net debt plus surplus cash. Because share sales pass both assets and liabilities to…
Market Multiples
Market multiples derive from comparable public companies and privatecompany deal data. UK recruitment agencies with £1m£5m adjusted EBITDA typically sell for 47…
EV/EBITDA Multiple
The ratio of enterprise value to adjusted EBITDA. It normalises earnings across varied capital structures and depreciation policies. Buyers may pay a higher mul…
Revenue Multiple
Used when EBITDA is minimal or distorted by owner remuneration. Multiples range from 0.3× to 1.0× revenue, with the upper end reserved for MSP/RPO or softwareau…
Discounted Cash Flow (DCF)
A DCF projects free cash flow over fiveplus years and discounts it at a weighted average cost of capital (WACC). Although sophisticated, DCF is sensitive to ter…
Comparable Transactions Analysis
Also known as "precedent transactions", this method benchmarks valuation against recently completed sales of similar agencies. Data sources include Zephyr, Merg…