Do You Really Know the Value of Your Company?

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 781 words

Most owners carry a number in their head, but few have one they could defend in front of a buyer, a lender or a judge. A current, realistic estimate of what your company is worth is probably the most useful financial fact you are missing, and once the first one exists it is easy to keep up to date.

Owners review their investment accounts and tax returns every year. The company, usually the largest asset they own, gets examined only when something forces the question: an offer, a partner dispute, a death, a divorce or a request from the bank.

Why a yearly check pays for itself

The case for looking every year, rather than only when a sale is near, comes down to four practical points. None of them requires you to want to sell.

• Unsolicited offers arrive without warning. A buyer who calls with a number wants an answer before you have time to study the market. With a current range you can tell a serious offer from a fishing expedition quickly.
• Personal events do not wait. Estate planning, a buy-sell agreement with a partner, a divorce or a health problem can each require a value on short notice.
• The direction matters as much as the figure. If value is flat or falling while revenue grows, something is wrong, whether margins, customer concentration or dependence on you. A yearly figure shows the trend.
• It tells you what the business must fund. Owners with most of their net worth inside the company need to know whether a sale would pay for the life they plan after it.

What a useful annual review includes

It does not have to be a formal appraisal every year. Once the records are in order, a practical review takes a few hours of your time, and the discipline it creates is worth as much as the number: owners who look at their company the way a buyer would tend to fix small problems before they harden into discounts. The review should cover:

• Adjusted EBITDA for the trailing twelve months, meaning earnings before interest, taxes, depreciation and amortization with owner-specific items added back, each one written down and explained.
• The range of multiples buyers are applying to companies of similar size and type, and the reasons yours would sit higher or lower.
• The risks a buyer would price: customer concentration, key-person dependence, contracts about to expire, equipment near the end of its life.
• A short list of changes that would move the number in the next twelve months.
• A note on what changed since last year and why, so the figures tell a story a buyer or lender could follow.

The value is not what you would take home

An estimate of enterprise value is the price for the business as a whole. It comes before paying off debt, transaction costs and taxes, and before any part of the price is deferred into a seller note or an earnout, a payment that depends on future results. An owner who knows the headline value but not the likely net proceeds does not yet know whether selling makes sense. Ask your CPA to turn the range into an after-tax figure under two or three possible deal structures.

Keep the working papers from each review. The second year takes far less effort than the first, and the comparison between years is where most of the insight comes from.

The gap between the headline and the check can be wide. Working capital left in the business, the treatment of excess cash and debt, and escrow held back for claims all come out of the price you hear about first.

Being ready is an option, not a commitment

Knowing your value does not mean you intend to sell. It means that if the right buyer appears, you can act while the interest is real, and if nobody appears, you spend the time raising the number instead of guessing at it. Our guide to evaluating an unsolicited offer shows how a current range changes that first conversation. Owners two or more years from a sale often pair the review with pre-exit consulting, which works on the specific value drivers the review exposes.

Where MDR & Associates fits

We give owners a free, confidential opinion of value, a low-to-high range, after reviewing three years of financials, whether a sale is near or not. When a formal written report is needed for estate or partnership purposes, business valuation is a separate service with its own price. For more on getting a candid figure, read how to get an honest opinion of value before committing to sell. The quickest start is a free valuation snapshot.

Where this fitsBusiness valuation in Texas →

Questions owners ask next

Is an online calculator good enough for a yearly check?

It can suggest a rough direction, but it cannot see your add-backs, customer mix or contract terms, which are exactly what move a multiple. Treat it as a curiosity, not as a figure to plan retirement around or to quote back to a buyer.

Should my CPA do the annual valuation?

Your CPA is the right person to confirm the numbers and the tax picture. What buyers are currently paying for companies like yours is market knowledge an M&A advisor sees in live deals. Many owners use both, with the CPA checking the financial recast the advisor prepares.