Dangers of Relying on Business Valuation ‘Rules of Thumb’
When it comes to determining the value of a business, many owners and investors are tempted to rely on simple rules of thumb. These quick formulas, for example, “2-3 times annual revenue” or “5-7 times Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA),” seem to offer an easy shortcut to…