Worked Example
Sample Valuation
A realistic UK SME example using clearly fictional data, walking through every stage of the valuation — and reconciling exactly to the figures loaded into the tool.
Meridian Industrial Packaging Ltd
Manufacturing · Packaging Businesses · Founded 2004 · 38 employees
Manufacturer of corrugated and protective packaging for industrial clients across the Midlands. Diverse blue-chip customer base with long-standing supply contracts.
Three-Year Financials
| Metric | 2026 | 2025 | 2024 |
|---|---|---|---|
| Revenue | £4,200,000 | £3,850,000 | £3,500,000 |
| Operating Profit / EBIT | £410,000 | £310,000 | £200,000 |
| Reported EBITDA | £530,000 | £420,000 | £300,000 |
EBITDA Normalisation Bridge
| Bridge | 2026 | 2025 | 2024 |
|---|---|---|---|
| Reported EBITDA | £530,000 | £420,000 | £300,000 |
| + Add-backs | £85,000 | £60,000 | £60,000 |
| − Downward normalisations | £70,000 | £70,000 | £70,000 |
| Adjusted EBITDA | £545,000 | £410,000 | £290,000 |
Maintainable EBITDA
The example uses the Weighted method, weighting the three positive Adjusted EBITDA years most-recent-first.
Normalisation Adjustments
Owner/director excess compensation
Two directors paid above an appropriate market replacement package.
One-off restructuring cost
Exceptional expense reorganising the production line.
Replacement management salary
Cost of a managing director under new ownership (downward).
Notional market rent
Premises held freehold; a market rent is deducted (downward).
Business Quality
- Generally positive business quality across the assessed factors.
- Some supplier concentration risk — a specialised board grade is single-sourced, though alternatives have been identified.
- Some owner dependence — the founder is central to key supplier relationships, with a phased handover planned.
- Good customer retention and recurring relationships under long-standing supply contracts.
Indicative Enterprise Value
Enterprise Value represents the value of the underlying business operations before adjustments for cash, debt and other debt-like items. It is not necessarily the amount payable for the shares.