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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 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.]
- Company A has a mix of Tech Enabled and Traditional Service.The Tech Enabled Services total $4,000,000.00 annually and the Traditional Service totals $1,500,000.00.
- If the same company in “1” above had annual EBITDA of $750,000.00, which would be the better valuation?
- 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.
- 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 answer.
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