Understanding EBITDA & Business Valuation

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. It measures your business's operating profitability before accounting adjustments. AskBiz calculates EBITDA automatically from your P&L data: Revenue minus COGS minus Operating Expenses (excluding interest, tax, depreciation, and amortisation). This is the metric most investors and acquirers use to value small and medium businesses.

The EBITDA & Valuation card appears in two places: the CFO Dashboard overview tab (below the headline metrics) and the P&L tab (below the profit and loss statement). It shows your current-period EBITDA, EBITDA margin percentage, month-over-month trend, and an estimated valuation range based on industry multiples for your country and sector.

AskBiz applies industry-standard EBITDA multiples to estimate your business value. The multiple varies by country, industry, and growth rate — typically 3-8x for African SMEs and 5-15x for high-growth tech businesses. The card shows a range (low to high estimate) based on conservative and optimistic multiples. This is an indicative estimate, not a formal valuation — it helps you understand your business's approximate worth.

Track EBITDA monthly to see whether your operational profitability is improving or declining. A rising EBITDA with stable revenue means you are controlling costs well. A falling EBITDA despite revenue growth means costs are outpacing income. If you are considering selling your business or raising investment, the valuation estimate gives you a starting point for negotiations.

The card shows how your EBITDA compares to the previous period — percentage change and absolute difference. If monthly P&L data is available, AskBiz shows a trailing trend so you can spot whether EBITDA is on an upward or downward trajectory. This is the same data investors would ask for during due diligence.