How to calculate business value for Electrical, Plumbing & HVAC company?

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May 04, 2023

by a searcher from The University of Chicago - Booth School of Business in Boston, MA, USA

Searchers, I came across a company that does an array of these services to commercial customers. Their EBITDA from 2019 till 2022 were ~$1M, $1M and $1.6M (most recent) respectively over revenues of approximately $4M to $6M during those years. How would you evaluate the enterprise value of the firm? Assume inventory is negligible. Also, what is the typical Working Capital needed for operating such a business?

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Reply by a searcher
from University of Wisconsin in Hopkinton, MA, USA
^redacted‌ - are you asking because you’re putting an LOi together or trying to do some valuation assessments to understand what types of targets to pursue? Maybe DM me and we can pursue the topic.
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Reply by a professional
from University of Utah in Salt Lake City, UT, USA
Multiple of EBITDA> Though I'd look at the equipment, leases, and team very closely as well. EBITDA is almost always different than what the seller tells you so I'd take time to understand what is the true number.
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