Title: How the Johnsons Saved $75,000 on a Struggling Landscaping Business Using EBITDA Multiple Analysis Tagline: How the Johnsons Saved $75,000 on a Struggling Landscaping Business Using EBITDA Multiple Analysis Problem: The Johnsons, a dual-income household earning $450,000 annually, were considering investing $250,000 in a local landscaping business. The business owner claimed the company was worth $1 million, citing strong revenue growth. However, after preliminary due diligence, the Johnsons felt uneasy about the asking price, especially with three college tuitions looming in the near future. They needed a clear, objective valuation method to determine if the investment was truly worthwhile. Solution: The Johnsons used Golden Door Asset's EBITDA Multiple Calculator to analyze the landscaping business's financials. They meticulously gathered the company's Enterprise Value, finding it to be $900,000 (after adjustments for debt and cash), and its EBITDA, which was reported at $150,000. This yielded an EV/EBITDA multiple of 6. Using comparable landscaping businesses in their region, they discovered the average EV/EBITDA multiple was closer to 4. This indicated the landscaping business was significantly overvalued. The Johnsons used these insights to renegotiate a more favorable entry valuation with the seller or to walk away from the proposed deal. ROI: By identifying the overvaluation, the Johnsons avoided a potential $50,000 loss on their initial $250,000 investment (20% immediate loss). Furthermore, by re-allocating the $250,000 to a lower-risk investment yielding an average of 10% annually, they stand to gain an additional $25,000 in profit over the next year. The total financial impact amounts to $75,000 in savings and potential earnings. Description: Discover how the Johnsons used the EBITDA Multiple Calculator to avoid a costly investment mistake and secure their financial future. Learn to spot undervalued or overvalued businesses before committing your hard-earned money. Category: Lead Gen