2. Business Analysis McDonald Real Estate will conduct its own evaluation process on each business, considering all aspects that will or may have an effect on the business value. 3. Market ComparisonA significant strength in our appraisal is the comparison of the subject business with other related sales data. McDonald Real Estate has access to a wide range of current market sales through BizStats. Each business will be compared to other similar businesses that have been sold not only by McDonald Real Estate but also other brokers in order to establish a fair market value. 4. Capitalisation Rate (Earnings Multiplier)The final step in the process is to select an appropriate capitalisation rate that reflects theidentified risks and opportunities that a potential buyer may have a view on.The capitalisation factor applied to most very good business operations providingevidence of sustainable earnings is normally 30% – 60% for EBPITD. VALUING A BUSINESS eieio.co.nz
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