The top 5 healthcare valuation multiples to know are EBITDA, price-to-earnings (P/E), price-to-sales (P/S), price-to-book (P/B), and EV/EBITDA.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and is a common multiple used in healthcare valuation..
And there is no single exact number that can be calculated.
Rather, what is negotiated ultimately determines the fair market value of your business and the price at which you will sell your business.
In general, private companies sell between .
There are now in excess of30 PE-backed dermatology groups (PEGs) with a vision for dermatology
Many use the management services organization, which allows PE firms to circumvent corporate practice of medicine laws, align cooperative physicians, and set the foundation for PEG evolution
A company’s EBITDA multiple provides a normalized ratio for differences in capital structure, taxation, fixed assets, and for comparing disparities of operations in various companies
The ratio takes a company’s enterprise value (which represents market capitalization plus net debt) and compares it to the Earnings
The average EBITDA multiple for dental practices in 2019 was 1
63xThe following is the EBITDA multiple calculation
For example, a dental practice has an EBITDA of $500,000 and an EBITDA multiple of 1
63xUsing the above metrics, the company is worth approximately $815,000
