Valuing a business is complex. Experienced practitioners have
written novels on the subject, but we don’t have time for that here.
Instead, this represents a high level crash course in business valuation
using the “EBITDA multiple” method, which is the most common valuation methodology used by private equity firms, strategic buyers, etc.
Q: How are businesses similar to homes and baseball cards?
A: They are all worth what the highest bidder is willing to pay for
them, no more – no less, regardless of what any book says. As a result,
businesses are typically valued based on sale prices...