Sunday, November 1, 2009

Depreciation vs. Multipliers

Although depreciation is not a direct cash expense, "Print Shop for Sale" nonetheless treats it as an expense when calculating owner's compensation and more importantly excess earnings.

Do not assume, however, that because we include or treat depreciation as an expense that it automatically results in a lower valuation method. Our valuation method is just as likely to poduce a higher valuation than a lower one - in either case it is a "fair market" value that is both practical and realistic from both the buyer's and the seller's perspective.

How is this accomplished? "Print Shop for Sale" uses a very detailed questionnaire for calculating its earnings' multiplier. This multiplier, because it relies on weighted answers to 14 different, industry specific questions, often results in a much more accurate multiplier than those used by many business brokers.

See "Print Shop for Sale" for further details. (



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