The Relationship Between Reasonable Compensation and Business Valuation
- April 1, 2017
- Posted by: RCR Admin Team
- Category: Archived
By Jack Salewski, CPA, CGMA & Paul S. Hamann
A common question in public practice is, “how much is my business worth?” This question comes up for a variety of reasons. It could be a business merger, sale of the business, divorce, death or even idle curiosity.
There are a lot of different factors that go into a business valuation. It is an oversimplification, but most businesses are valued as a multiplier of earnings before interest, taxes, depreciation, and amortization (EBITDA).