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.
| Industry | EBITDA multiple | Revenue multiple |
|---|---|---|
| Software & SaaS | 4.00x – 9.00x | 1.00x – 4.00x |
| Professional services | 3.00x – 6.00x | 0.50x – 1.30x |
| Healthcare services | 4.00x – 7.50x | 0.60x – 1.50x |
| Manufacturing | 3.50x – 6.50x | 0.50x – 1.20x |
| Construction & trades | 2.50x – 5.00x | 0.30x – 0.80x |
| Retail | 2.00x – 4.50x | 0.20x – 0.70x |
| E-commerce | 2.50x – 5.00x | 0.40x – 1.50x |
| Restaurants & food service | 2.00x – 4.00x | 0.25x – 0.60x |
| Wholesale & distribution | 3.00x – 6.00x | 0.20x – 0.70x |
| Transportation & logistics | 3.00x – 5.50x | 0.30x – 0.80x |
| Home & personal services | 2.50x – 4.50x | 0.40x – 1.00x |
| Marketing & agencies | 3.00x – 5.50x | 0.50x – 1.20x |
| Real estate services | 3.00x – 5.50x | 0.50x – 1.50x |
| Education & training | 3.00x – 5.50x | 0.50x – 1.20x |
| Other | 2.50x – 5.50x | 0.40x – 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.
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