Menu
Methodology · version 2026.10-1

How Yieldedu values a business

Every figure in a Yieldedu report is calculated by a deterministic engine from the numbers you enter. The AI layer writes the analysis around those figures. It cannot change them, and it is instructed never to invent financial data, comparable companies, or transactions.

1. Establish earnings

We use the EBITDA you report. If you don't provide it, we use revenue minus expenses as a proxy and say so in the report. Net profit is handled the same way.

2. Select reference multiples

Each industry has a low, mid, and high reference range for EBITDA and revenue multiples, typical of small and lower-middle-market private companies. These are general ranges, not comparable transactions.

3. Adjust for your business

Multiples are adjusted for growth, earnings scale, profit margin, and operating history. Each adjustment and its rationale is listed in your report, and the combined adjustment is capped at ±40%.

4. Blend the methods

For profitable businesses, enterprise value is 75% EBITDA-multiple and 25% revenue-multiple. If EBITDA is zero or negative, only the revenue method is used and its range is limited to the lower half.

5. Bridge to equity value

If you provide debt or cash, equity value = enterprise value − debt + cash. Otherwise the value assumes a cash-free, debt-free sale.

6. Rate confidence

A confidence score reflects how complete your data is: missing EBITDA, debt, cash, growth, documents, a short history, or losses each reduce it.

Reference multiple ranges

Before business-specific adjustments.

IndustryEBITDA multipleRevenue multiple
Software & SaaS4.00x – 9.00x1.00x – 4.00x
Professional services3.00x – 6.00x0.50x – 1.30x
Healthcare services4.00x – 7.50x0.60x – 1.50x
Manufacturing3.50x – 6.50x0.50x – 1.20x
Construction & trades2.50x – 5.00x0.30x – 0.80x
Retail2.00x – 4.50x0.20x – 0.70x
E-commerce2.50x – 5.00x0.40x – 1.50x
Restaurants & food service2.00x – 4.00x0.25x – 0.60x
Wholesale & distribution3.00x – 6.00x0.20x – 0.70x
Transportation & logistics3.00x – 5.50x0.30x – 0.80x
Home & personal services2.50x – 4.50x0.40x – 1.00x
Marketing & agencies3.00x – 5.50x0.50x – 1.20x
Real estate services3.00x – 5.50x0.50x – 1.50x
Education & training3.00x – 5.50x0.50x – 1.20x
Other2.50x – 5.50x0.40x – 1.00x

Limitations

Yieldedu estimates are indicative. They do not account for owner compensation normalization, working capital targets, customer concentration, deal structure, or local market conditions unless you describe them. They are not an appraisal, fairness opinion, or professional advice. For a transaction, engage a qualified valuation professional.

Value My Business