Why You Should Be Wary When Discussing EBITDA In M&A

* Guest post by John Dearing, Capstone Managing Director

Just last week during a valuation discussion, I noted to the Board to be wary of EBITDA multiple discussions in the world of M&A. As an article from PE Hub points out, when you ask five different professionals to calculate a company’s EBITDA, you’ll come up with more than five different answers. While EBITDA is commonly used to determine purchase price, always make your own judgment and calculations.

 

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