From $400k to -$200k EBITDA: How Do I Value This Deal?

by a searcher from University of Washington

1 week ago

I'm considering acquiring a business that previously generated $300-400k in trailing twelve-month EBITDA. However, recent performance has declined sharply, with current TTM EBITDA projected to be around -$200k. The business holds substantial, seemingly collectible accounts receivable exceeding $1 million. Given the dramatic EBITDA fluctuation, traditional valuation methods using multiples are ineffective. How should I approach valuing this business?

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11 comments

intermediary from University of Pisa

seems like a falling knife and you never catch one... :) unless you know why it happened and how to fix it

5 days ago | like reply | 0 likes

searcher from University of Toronto

I agree with the sentiments here. I'll add that it can depend on what caused the EBITDA to change so drastically and if you think that you are the perfect person to fix that kind of problem. If not, it sounds too risky.

1 week ago | like reply | 0 likes

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