Everyone I've spoken with has a different take on whether A/R and/or inventory is included in the asking price or not. Many deals I've looked at in this range seem to exclude the inventory from the asking price, but include the A/R.
I'm currently looking at a deal where both A/R and inventory are excluded from the asking price. Would love any insights others are having into this, and if this deal is outside of the norm, any best practices in discussing this with the broker/owner during negotiations.
For <$1M EBITDA deals, is A/R & inventory normally included or excluded?

by a searcher from University of Florida
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2) WC is included in all PE deals regardless of size. How does that work? ALL PE DEALS ARE BASE DON ROI, NOT ON MULTIPLES. PE does look at multiple, but as a sanity check, not as a primary determinant.
3) My approach on all deals.
a) A buyer should calculate "Total Cost" (X) to acquire the business. X is "price" from buyer perspective. X should include any and all assets required to achieve the go-forward SDE/EBITDA. X should be financeable and meet buyer's expected ROE.
b) Seller's price (Y) colud be different than X if Y excludes all or some of WC. Typicall Y is less than X. If the deal is based on Y, then buyer should have financing lined up to fund the X-Y spread post-acquiaition.
c) If seller/broker cannot except Y, then buyer should walk.
4)) A buyer who does do pro-forma model, meaning only relies on market multiples, will not be able determine X. And, hence, will reduce their ability to convince seller/broker on X (including WC) or Y (excluding WC).
5) Market muliples are very helpful. But they are not a gospel even though firms like BVR go out of their way. And, even after all that the std. deviation is +2 (e.g. if average multiple is 5, then 2/3 of the transactions range from 3 to 7).
To calculate multiple, the databases need SDE/EBITA and Price. Look at the variations.
What is SDE/EBITDA? Is that adjusted or reported? Is that broker's adjusted number or that of buyer? Is that TTM or last FY or average of last few years or foreacsted?
What is Price? Does that include earn-out, non-compete, real estate, WC, seller salary, ec.?
6) The only way I know to overcome these issues is to use both the pro-forma and market multiple.