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CHARTWELLVALUE

Business Insights-Greater Value

Get Your Value

CHARTWELLVALUE

Business Insights Greater Value

Businsess Valuation

Where will your business be worth​

in five years?​

Project tomorrow’s earnings and multiple to see where your value is headed.​
Get Your Value
5-YEAR EV FORECAST​

Stop running a business. Start building an asset​

Most owners plan next year’s revenue. This forecast plans what the business will be worth in five years, and what it takes to get there.​

1

See future value​

Turn today’s P&L into a five- year view of Enterprise Value.​

2

Set clear targets​
Name the SDE and EVO, Score you need to hit your number.​

3

Track it yearly​
Re-run it each year to see whether value is really growing.​
THE INPUTS​

Seven assumptions drive the forecast​

Assumption Sample What it means
Revenue growth / yr 8% How fast revenue grows each year
Gross margin 41% Gross profit ÷ revenue: what each sale really earns
Overhead growth / yr 5% Should grow slower than revenue, so margin expands
Add-backs growth / yr 8% Grow with revenue. Buyers discount add-backs that outpace it
EVO Score today → Year 5 45 → 60 Weak tier to Adequate tier, about 3 points a year
Multiple today → Year 5 2.5x → 3.5x What the higher score is worth, about +0.2x a year
Debt paydown / yr $10K $50K today, paid off by Year 5
Starting point (illustrative): $1,000,000 revenue · $300,000 overhead · $90,000 add-backs · $50,000 debt​
YEAR-BY-YEAR BREAKDOWN​

From earnings to Enterprise Value​

Year Revenue Gross profit Earnings Add-backs SDE EVO
Score		 Multiple EV Equity Value
Today $1.00M $410K $110K $90K $200K 45 2.5x $500K $450K
Year 1 $1.08M $443K $128K $97K $225K 48 2.7x $608K $568K
Year 2 $1.17M $478K $147K $105K $252K 51 2.9x $732K $702K
Year 3 $1.26M $516K $169K $113K $283K 54 3.1x $876K $856K
Year 4 $1.36M $558K $193K $122K $316K 57 3.3x $1.04M $1.03M
Year 5 $1.47M $602K $220K $132K $352K 60 3.5x $1.23M $1.23M
SDE = Earnings + Add-backs · EV = SDE × Multiple · Equity value = EV − debt, before taxes and transaction costs​
THE RESULT​

Enterprise Value grows from $500K to $1.23M​

Earnings + value drivers Earnings only (stuck at 2.5x) $1,300K $1,000K $700K $400K Today Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
FROM GROWING EARNINGS​

+$379K​

SDE grows $200K → $352K​
FROM RAISING THE MULTIPLE​

+$352K​

EVO Score 45 → 60, multiple 2.5x → 3.5x​
Total gain: +$731K. Almost half comes from the multiple. That gap between the two lines is your GAP Number.​
WHAT MOVES THE FORECAST​

Three levers you control​

Grow SDE​

Grow revenue faster than overhead, protect gross margin, and keep add-backs clean and documented.​

Raise the multiple​

Lift your EVO Score by strengthening the nine Value Makers: owner independence, recurring revenue, clean books.​

Reduce debt​

Every dollar of debt paid down goes straight to what you keep at the closing table.​
Run the business.

Build the asset.​

Get your 5-year forecast​
Terry Eck · 847-867-5468​
Terrye345@gmail.com​

chartwellvalue.com​

Chartwell Value Advisory

Reading Your P&L

Four lines. One number that changes everything.

Most owners can tell you, within a few thousand dollars, what their business is worth – but not where that number comes from. It comes from four lines on the P&L they’ve skimmed past a hundred times.

The Four Lines That Matter

1

Revenue

What came in – says nothing
about worth.

2

Expenses

Including add-backs most
owners never separate out.

3

SDE

True owner benefit – the real
valuation starting point.

4

Enterprise Value

SDE x Multiple – what you
actually walk away with.

"Your P&L answers one question a buyer actually cares about: revenue tells the story about size. Enterprise Value tells the story about worth."

Buyers, lenders, and appraisers read your P&L this way whether you do or not. Start managing to it years before you plan to sell.

Get Your Value

A lifetime of work deserves more than a valuation - it deserves a strategy that converts enterprise value into lasting worth.

Chartwell Value Advisory | Excell Business Brokers LLC

Know Your Numbers

What every buyer expects to see before they’ll put a number on paper

1

Recast P&L

Shows true owner earnings after add-backs (SDE)

2

3-Year P&L Summary

Revenue, gross profit, and net profit trends

3

Cash Flow Statement

Real cash generated by the business each year

4

Business Valuation Estimate

Value range based on SDE and multiples

5

Tax Return Reconciliation

Reconciliation of P&L to tax filing

6

Nine Value Drivers

The actions that increase your multiple

7

Due Diligence Checklist

Documents available for buyer review

8

Know Your Numbers

The financial metrics every owner must track

9

5-Year Forecast

Your roadmap from current value to exit value

10

Owner Assessment

30-question diagnostic – what a buyer would find today

Section 8: 5-Year EV Forecast

This forecast shifts the owner’s focus from running the business to building an asset. Enter your numbers in the blue cells; grey cells calculate automatically.

Assumption Sample Input What It Means
Revenue growth rate / yr 8% How fast revenue grows each year.
Gross margin % 41% Gross profit ÷ revenue.
OpEx growth rate / yr 5% How fast overhead grows. Should be less than revenue growth.
Add-backs growth rate / yr 12% How your documented add-backs grow.
Starting multiple 2.50x Your current SDE multiple based on risk profile.
Multiple growth / yr +0.10x How much the multiple improves as you build value drivers.

Year-By-Year Breakdown

Starting revenue $1,000,000 . EBITDA margin 20% . EV multiple 3x . Annual growth 15% . Debt $50K

Year Revenue EBITDA Margin EV (3×) Debt Your Worth Growth
Year 1 $1.00M $200K 20% $600K $50K $550K —
Year 2 $1.15M $230K 20% $690K $50K $640K +15%
Year 3 $1.32M $265K 20% $794K $50K $744K +15%
Year 4 $1.52M $304K 20% $913K $50K $863K +15%
Year 5 $1.75M $350K 20% $1.05M $50K $999K +15%

For informational purposes only. Not financial or legal advice. Consult a qualified advisor for your specific situation.