By: Doug McCullough
Share This Post
Know Your Worth: Valuing Your Business
Thinking about selling your company? It is paramount to know your company’s fair market value so you can get an appropriate price. Fair market value is typically determined as enterprise value by taking a multiple of EBITDA (earnings before interest, tax, depreciation and amortization), with the multiple being determined by industry norms, which are subject to change. Alternatively, if the company is selling its assets, a company’s value may also be determined by its liquidation value. However, this valuation method is not appropriate for a company that is viable as a going concern. By knowing your current fair market value, you will have a better idea if the time is right to sell your company. In addition, you will be armed to judge any unsolicited offers to purchase your business.