Having trouble agreeing on a sales price. Business has been under current ownership for almost 10 years. First 9 there was no profit, year 10 the business is profitable. Seller feels ebitda based on last 3 years should be 5X. Anyone with experience here weigh in? Owner is also still hands on. Thanks. Pretty new to this.
EBITDA = BULLSHIT. It’s a formula that most corporations use to measure. But if you ask Charlie Munger he might disagree with ebitda.
You need to calculate real net. Look at his statement, revenue and his cost and whats in his expenses (the middle part)
and whats remaining.
Now let’s see if you know what “real net” means and how someone is supposed to calculate that.