Comparable Sales & Industry Multiples
The market approach is the argument a buyer finds most persuasive, because it is what other people actually paid. Its weakness is comparability: size, geography, customer concentration, and deal terms all move multiples, and reported small-company data is thin. ExitSight lets you keep your own comp set with notes on each transaction, so the adjustment reasoning survives into the report.
THE FORMULA
Value = Your metric × Median multiple from comparable sales
Applied across three metrics; ExitSight shows all three indications and their spread rather than one blended number.
When to use it
- Several genuinely similar businesses have sold recently in your industry and size band.
- You are pricing a listing or testing an offer against the market.
- The income methods disagree and you need an external reference point.
When it misleads
- The only "comparables" are public companies many times your size.
- Deal terms in the comp set are unknown — an earnout-heavy price is not a cash price.
- Your company differs on a driver that plainly moves value, such as one customer at 40% of revenue.
What ExitSight asks you for
| Input | Where it comes from |
|---|---|
| Revenue, SDE, and EBITDA | Recast income statement |
| Comparable transactions | Your comp set, entered with size, date, terms, and notes |
| Multiple selection | Median, mean, or your own chosen point in the range |
| Comparability adjustments | Percentage adjustments with a stated basis per factor |
Worked example
The sample engagement, valued in the under-$250K-EBITDA band of its industry group:
| Value based on cash flow, average | $942,425 |
| Value based on EBITDA, average | $448,503 |
| Value based on revenue, average | $1,751,950 |
| Combined average across the reported statistics | $1,050,055 |
In the report
Prints as Table 9 with the comp set, each transaction’s date and size, and the adjustments applied. See the sample report ›