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The Broker
Q: JS- Midlands- "I keep hearing about EBITDA what is it used for?"

A: EBITDA stands for
Earnings Before Interest, Taxes, Depreciation and Amortisation.

At the VBA we use maintainable profit as a basis for valuing the goodwill of the practice, which is similar to the EBITDA
The MP is the net profit after deducting costs unrelated to the purchaser and adding back unaccounted veterinary salaries and property rentals if not already used.
So, a practice with a maintainable profit of say £200k could have a value between £700k up to £2m depending upon the multiplier used.