Taking $355,000 as our average, let's apply a 3 times multiplier.

Taking $355,000 as our average, let's apply a 3 times multiplier. That brings us to an enterprise value of $1,065,000. But remember, that's the business value, not the equity value. Adjustments are needed. If real estate is involved, it's a separate purchase. Assuming this deal doesn't include any, we need to determine the surplus cash. How much will I have at closing?

There's cash remaining in the business, but we need to subtract a minimum amount for working capital - usually a month's worth of sales revenue. To calculate, divide the past year's revenue by 12 and subtract that from the cash on the balance sheet. That gives us our surplus cash.

#BusinessValue #EquityValue #SurplusCash #RealEstateInvesting

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✅ About Carl Allen:

Carl Allen is the founder and CEO of Dealmaker Wealth Society. Carl is an entrepreneur, investor, and corporate dealmaker with almost three decades of experience. Carl has worked on transactions worth over $48 billion, which includes over 330 acquisitions and sales. For almost three decades, Carl has analyzed thousands of businesses, big and small, in 17 different countries and across nearly every business sector.

Carl’s reputation as an investor and corporate dealmaker has led him to advise some of the world’s largest corporations on investments, acquisitions, disposals, and restructuring. Carl has also assisted hundreds of business owners in raising equity and debt finance.

Through Dealmaker Wealth Society, Carl coaches and mentors our customer base of more than 11,300 entrepreneurs, investors, and business owners. All leverage acquisitions to generate cash flow, wealth creation, and impact.

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