I pulled the recorded financials on a systematic sample of live listings on Baton this week. Asking multiples were modest. The median asking price was 3.1x adjusted cash flow. The range was 2.2x to 5.3x, and 18 of 21 asked 4x or less. Add-backs are where the work is. 20 of 21 had net positive add-backs. The median was about 30% of adjusted cash flow, but in 9 of 21 the add-backs were half or more of the number being priced. In 3, reported net income was negative and the add-backs produced all of the cash flow. An owner or officer compensation add-back appeared in 9 of 21. A 3x multiple on a number that is half add-backs is a different deal from 3x on a number that is 10% add-backs. Two habits help: - Price it twice: once on adjusted cash flow, once on reported net income plus only the add-backs you can tie to a tax return. - If owner compensation is added back, subtract a market salary for whoever replaces the owner before you run the 1.25x coverage test.