Discretionary Earnings are made up of the following: (a) the Net Earnings of the business on an accrual basis, (b) plus the reduction of Interest, Taxes, Depreciation and Amortization, (c) plus all of the expenses (add backs) that are considered personal to ownership, and (d) plus any one time business expenses that a buyer would never have again on this business. Note that the user should only adjust for expenses that can actually be seen on the Income Statement used for this valuation. For the current year, please estimate all financial information for the full 12 months to ensure a proper valuation. We recommend that you consider only using modest growth in this calculation, since we will take this into account in the calculator through our Q&A Process below.
The next step in this process is to further define a few high-level factors specific to your particular company. This will help our system provide you with an Enterprise Value Range more closely aligned to a company similar to yours in size and attributes. In this section, we look at the tech vertical you operate within (choose the one most closely related to your business model), the number of staff members in your company (including Virtual Assistants, Employees, and Contractors, but not including Third Party Companies), infrastructure, growth, risk profiles, and value propositions. As noted above, this is in no way represents an exhaustive list of factors ultimately necessary to formulate an accurate valuation on your company, but it will help give you an idea of the general value range a company like yours would fall within.