Valuation Model
Calculate Your Firm’s Value
Our Valuation Model accurately estimates market value, reviews key metrics, and shows what drivers build value. There is no cost to run this model.
How Firms Are Valued
The pricing model has changed.
Yesterday’s Pricing
The historic way of valuing accounting firms died with private equity. Transactions used to be 80% to 100% of the firm’s revenue paid over five years, based on retention of the client base with little or no cash.
Today’s Values
Price is based on the net adjusted EBITDA times a multiple a buyer is willing to offer. Creating the adjusted EBITDA involves analysis of a series of variables that impact price, cash, and future value.
Inside the Model
What we analyze.
Transaction Variables
Examples include profitability before any equity partner base, draw, or distributions, a reduction in equity partner compensation, and series of primary and secondary addbacks to establish the firm’s profitability moving forward.
Metrics + Value Drivers
We incorporate these into the model so firms can understand where they are in relation to others. Examples include Revenue Per Professional Head, Revenue Per Owner, and Realized Dollars Per Hour. The model adds “what-if” sections on the impact of pricing and cross-selling that could occur using your data.
Current Internal Buyout
After we calculate the estimated purchase price, we compare it to your internal buyout value. This provides equity partners with the ability to measure the difference between an internal vs external sale.
The Model
We have run the model on over 100 firms.
There is no cost to do this, but we require some financial and operational data to walk you through the model. No obligation or hard sales pitch. Just educating you on the market.
See what your firm is worth today.
No cost, no obligation. Just a clear view of the market.