Your Ask Joey ™ Answer

As a seller, is it better to have a higher or lower EBITDA multiple?

Sellers want to maximize the EBITDA multiple. Buyers want the opposite – they want as low of an EBITDA multiple as possible. Business brokers will often use EBITDA multiples from recent transactions in the industry to understand what EBITDA multiple a buyer might be willing to pay when they set the purchase price.

The visual below illustrates how an EBITDA multiple is calculated, along with who benefits from a higher or lower EBITDA multiple.


Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner