Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The majority of company valuations today are based on multiples of revenues or EBITDA. Using the following data please state the company valuation for each
The majority of company valuations today are based on multiples of revenues or EBITDA. Using the following data please state the company valuation for each of the scenarios below. (SaaS Revenue 4x multiple: Tech Enabled Service Revenue 1.5x multiple: Maintenance Revenue 2x multiple: Traditional Service Revenue 1x multiple: Positive EBITDA 15x multiple.] (15 PTS) a. Company B has high growth SaaS revenue of $10,000,000.00 and Maintenance Revenue of $4,500,000.00. It also has annual operating EBITDA of -$350,000.00. Based on these facts would an offer of $31,000,000.00 for the company be acceptable? Please explain your answer. b. Company C is a pure Traditional Services company with $3,500,000.00 in annual revenue but $1,000,000.00 in EBITDA. Based on this should the owner accept a lower than standard 10x EBITDA multiple or $10,000,000.00? Please explain your
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started