Tell us about the business

Just a name and an industry to start — you can always come back and change these.

Earnings history

Add each year you have accounts for — 2 to 7 years. Recent years count more toward the working average used in the valuation.

Revenue · NPBT (net profit before tax) · Interest · D&A (depreciation & amortisation), plus three normalisation columns so each type of adjustment is visible on its own rather than lumped into one number:

• Owner/RP comp — add back if the owner or a related party is paid above a market-rate replacement wage (including via fees or consultants' invoices from a related company or trust); subtract if they're paid below market.
• RP rent — if premises are leased from the owner or a related party, the difference between what's actually charged and true market rent.
• One-off items — anything non-recurring or non-operating: gains/losses on selling assets, legal settlements, restructuring costs, insurance payouts. Subtract a gain, add back a cost.

Enter the oldest year first. Each normalisation column nets to positive (adds to earnings) or negative (reduces them) — together they turn reported EBITDA into an estimate of sustainable, ongoing earnings.

Balance sheet

What the business owes, what it holds beyond day-to-day trading, and any abnormal items — each one moves enterprise value and equity value directly.

List each related-party loan separately. Enter what the business owes the related party as a positive number, or a negative number if the related party owes the business instead.

Check each against a real search at ppsr.gov.au before relying on this. Mark "Yes" for anything registered or suspected, and note it briefly.

Mark "Yes" for anything that applies, and note it briefly — these often need a dollar figure added to the balance sheet adjustments table below once quantified.

List anything else real that changes what the owners walk away with — surplus assets not needed to trade (add, e.g. surplus cash, an investment property), or liabilities and one-off items a buyer would inherit that aren't in net debt above (subtract, e.g. unbooked leave, unpaid deposits, contingent claims).

Enter a positive amount for something that adds to equity value, negative for something that reduces it.

Risk profile

What makes this business more or less risky to buy — this shapes the multiple, not the balance sheet.

Normalisation schedule

Maintainable earnings are reported earnings restated for items that will not recur, are not operating, or are not at arm's length. Work through each category below — even a "considered, none" is evidence the question was asked.

Enter amounts per year: positive where the item reduced reported profit (add back), negative where it inflated it (remove). Owner/related-party pay, related-party rent and one-off items are entered on the Earnings history step. Each adjustment needs a source and a reason — unsupported or recurring adjustments are routinely rejected by buyers, lenders and the Court.

Leases, capex & working capital

Three things that sit outside EBITDA but change what a buyer will actually pay: how leases are treated under AASB 16, how much capital the business must keep spending, and the level of working capital it needs.

Since AASB 16, most property and equipment rent no longer appears as an operating expense: it is replaced by depreciation and interest, which lifts EBITDA. Industry multiples are usually quoted on a pre-AASB 16 basis (rent treated as a cost). Mixing the two bases overstates value.

EBITDA ignores the cost of keeping assets productive. A business that must reinvest most of its EBITDA is worth less than one that converts it to cash.

Trade receivables + inventory + prepayments, less trade payables and accruals — excluding cash, debt, tax and related-party balances. A buyer will normally price on the basis that the business is delivered with a "normal" level; a shortfall at completion reduces the price, a surplus increases it.

Debt-like items & asset cross-check

Obligations that are not bank debt but that a buyer will deduct from the price, plus an asset-based cross-check on the earnings value.

Enter each as a positive amount owed (it is deducted from equity). Avoid double-counting: anything already inside bank debt, related-party loans, the dilapidations item, or the working-capital figure should not be entered again here.

Where earnings are weak or negative, an earnings multiple is not a reliable value and the asset-based approach becomes the primary basis. Enter adjusted net assets: assets restated to fair value (or net realisable value if going concern is doubtful) less all liabilities.

Basis & scope of the valuation

A valuation is only meaningful for a stated purpose, standard of value and date. These are the matters APES 225 (Valuation Services) expects any engagement to state up front.

APES 225 expects the valuer to say which approaches were considered and why. Mark each one.

Disclosures

What a professional valuation or forensic report would need to state alongside this figure — some pulled automatically from what you've already entered, some worth adding here.

Governs scope, sources, limitations and objectivity for CA ANZ / CPA Australia members doing this kind of work.

Governs the basis of value, methodology, assumptions and restrictions on use that a valuation engagement must state.

How and when revenue is recognised affects the reported figures feeding this valuation — worth stating plainly, especially for surcharges, rebates and ad hoc fees billed alongside the core service.

Officeholders, shareholders, related-party loans and any owner/related-party normalisation, gathered from earlier steps.