Glossary

« Back to Glossary Index

Owner Benefit

« Back to Glossary Index

Owner benefits” in the context of business valuation typically refers to the financial advantages or perks that a business owner receives from the operation of the business. These benefits are often considered as part of the overall financial picture when assessing the value of a business. Owner benefits are sometimes added back to the business’s financial statements to provide a more accurate representation of the business’s earning power or cash flow. The goal of adding back these owner benefits is to present a more accurate picture of the business’s financial performance and to calculate a normalized or adjusted earnings figure. This adjusted earnings figure is then often used as a basis for applying a valuation multiple or other methods to determine the overall value of the business. It’s important for business appraisers and valuation professionals to carefully analyze and document these owner benefits to ensure a fair and accurate business valuation.

« Back to Glossary Index