One of the eight factors that contribute to your company´s sellability is your financial performance. Specifically, the size of your turnover along with your past and expected profitability.
Your score out of a possible 100 reveals an attribute of your business that requires improvement in order to increase the value of your company.
A financial acquirer sees buying a business as paying today for a stream of profits in the future, which is why companies are generally bought and sold using a multiple of earnings. But focusing on your multiple is a little bit like a hypertensive person focusing on his or her blood pressure report. To really understand the number – and to move it up or down – you have to understand the calculations.