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Many business owners assume that the value of their business is determined simply by its profit. While profitability is certainly important, professional business valuations consider a wide range of financial and operational factors. Understanding these factors can help explain why two businesses with similar profits may have very different valuations. For family law clients, understanding what drives business value can also reduce unrealistic expectations and help negotiatio

When people talk about business valuations, they often refer to multipliers such as “three times profit”. While multipliers are commonly used in valuation, the process is far more complex than applying a simple rule of thumb. Professional valuers use multipliers as one component of a broader valuation analysis. What Is a Valuation Multiple A valuation multiple is a figure applied to a financial metric such as revenue or earnings to estimate the value of a business. Common mul

When valuing a business, one of the first questions a forensic accountant must answer is which earnings metric should be used. Two commonly used measures are EBITDA and EBIT . Although the difference may appear minor, the choice between these metrics can significantly influence the final valuation. Understanding EBITDA EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. This measure focuses on the operating performance of the business and remove

One of the most misunderstood aspects of business valuations in family law matters is the difference between market value and value to the owner . These two valuation concepts can produce very different results, and understanding the distinction is essential for anyone involved in a property settlement where a business forms part of the asset pool. What Is Market Value Market value represents the price that a willing buyer would pay a willing seller in an open and competitiv

When couples separate and begin negotiating a property settlement, one of the most complex assets to divide is often a business. Unlike property or bank accounts, a business does not have a fixed market price. Its value must be carefully analysed and determined by an independent professional. In Australian family law matters, a business can represent a significant portion of the asset pool. If the value is misunderstood or inaccurately calculated, the entire settlement can be