We use the owner’s profit based on EBITDA (earnings before interest, taxes, depreciation and amortization), which is also known as “Owner’s Cash Flow”.

However, the EBITDA of small and medium-sized companies often has to be adjusted. This is due to the fact that entrepreneurs, often for tax reasons, report a lower official EBITDA in order to reduce the tax burden, preserve liquidity and build up hidden reserves. We are therefore adjusting EBITDA in order to better estimate the true historical earnings power of the company.