Discretionary Income Multiplier Method

The discretionary income multiplier method is a tool used to determine the value of a company or small business. It incorporates the discretionary income and the risk multiplier to determine the value of the small business operation.

EBITDA – Buyer Beware (Case Study)


This article will illustrate the opposite effect using the same business information. A buyer of a business should be leery of financial information and look for improper accounting processes. The goal is to reduce the operational income and ultimately the value of the business. The goal is to get the business valuation to a realistic number.

Stability of Historical Earnings

Stability of Historical Earnings

No other element of the Multiply Discretionary Income Formula has as much weighted value as the historical earnings of the company. Every knowledgeable business entrepreneur, accountant, lawyer, broker, you name them; they look for this information first. There’s a reason for this.

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