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ing to the report, businesses generating EBITDA which are earnings before interest, tax and depreciation in the range of $1.5 million to $4 million were sold for $10 million to $25 million. Thats an average EBITDA multiple of 5.8 times and about 1 times revenues.
Asset-based valuation is one of the most common methods for manufacturing business valuation. This balance sheet-based approach adds together all of a companys assets and subtracts liabilities to arrive at a final valuation. There is also a need to evaluate intangible assets.
Generally speaking, a good EBITDA margin for manufacturing businesses falls between 5% and 10%.
Asset Method: This method is simply calculated by taking the difference between business assets and liabilities. For example, if you have $100,000 in assets and $20,000 in liabilities, the value of your business is $80,000 ($100,000 $20,000 = $80,000).
How do you find the net worth of a business? To check the net worth of a business, one can look at the companys balance sheet and subtract net liabilities from net assets. If the result is positive, the company has a positive net worth and is financially healthy.
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Tally the value of assets. Add up the value of everything the business owns, including all equipment and inventory. Subtract any debts or liabilities. The value of the businesss balance sheet is at least a starting point for determining the businesss worth.
Market capitalization is the simplest method of business valuation. It is calculated by multiplying the companys share price by its total number of shares outstanding.
One method is to look at a companys price-to-earnings (P/E) ratio, which is its stock price divided by its earnings per share. If a companys P/E ratio is below that of its competitors or the overall market, then it may be undervalued.

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