Search Fund Quality of Earnings (QoE) Solver

Underwrite normalizing reported net income into institutional lender-quality Adjusted EBITDA, removing discretionary seller add-backs and pricing acquisition debt service capacity.

Reported Net Income & Add-Backs

Seller Reported Unadjusted Net Income ($ USD)

Owner Discretionary Perks & Travel Add-Backs ($)

Replacement General Manager Market Salary ($ / yr)

Interest, Taxes, Depreciation & Amortization ($)

Normalized EBITDA & Enterprise Valuation

Lender-Quality Normalized Adjusted EBITDA

$1,700,000 / yr Adjusted EBITDA

Implied Enterprise Valuation at 5.0x Purchase Multiple

$8,500,000 Purchase Valuation

Maximum 3.5x Senior Bank Debt Funded

$5,950,000 Senior Debt