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M&A Terms Every Business Owner Should Know

Class VI Partner

Add-Backs or Adjustments “Add-Backs,” or Adjustments to Earnings, are additions to reported net income figures typically proposed by sellers for one-time expenses (e.g., Multiple of Earnings Multiple of Earnings, similar to Multiple of EBITDA, refers to the multiple of a company’s earnings to establish the entity valuation of the company.

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Methods of Business Valuation by Their Profitability

Equilest

This multiple is similar, by analogy, to the PER (Price to Earnings Ratio of listed companies). This consideration reminds us that it is not for the buyer to buy a company for the price corresponding to the value he thinks he is able to give it, but for the value, it has for the seller. EV = Result x Multiple. x250% per year.