1. Enter annual revenue
Use a normalized recent annual revenue figure for the channel business.
2. Enter operating expenses
Include recurring costs required to sustain the modeled revenue.
3. Choose an earnings multiple
Use a scenario multiple that reflects risk, growth, concentration, and transferability.
4. Adjust for assets and liabilities
Add transferable assets and subtract obligations included in the deal.
5. Review the valuation range
Compare the central estimate with lower and higher multiple scenarios.