Valuation & Earn-Out Averages for 2009 While it is customary to "communicate" value as a multiple of revenue, knowledgeable buyers never "calculate" value as a multiple of revenue. Value is a function of pro forma earnings, future growth in earnings and the risk associated with the anticipated projection of earnings. Pro forma EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is an industry accepted short cut that is more relevant than a multiple of revenue since EBITDA has a direct relationship to earnings. This item illustrates valuation and earn-out averages for 2009. The earn-out averages displayed are for deferred proceeds paid based upon post-closing performance, typically paid over the three years following the closing and paid out based on the profit of the organization. Remember, in most transactions, the book-of-business value is paid partially on a guaranteed basis and partially on an earn-out basis. Guaranteed proceeds, for example, can be cash, stock or seller-financed notes. View Valuation & Earn Out Averages for 2009		Tips & Tricks! What Questions do you need Answered? The Discussion Groups (there are 6 different forums), could have answers to your questions. Look through or "Search" the postings to see if your question has been answered. The "Search" link is located in the upper right corner of the page once you are logged-in. Remember, you can respond to questions in one or all of the groups to answer the questions others have. Go to Discussion Groups!

Did You Know

Ratio of CL Service Personnel to CL Producers Have you ever wondered what the ratio is between commercial lines service personnel and commercial lines production personnel? Well, we have and so have many agency principals and managers. To research the answer to this question, we turned to our PHP (Perspectives for High Performance) database and generated a graph that illustrates the average number of commercial lines service personnel to commercial lines production personnel by average commercial lines account size. The account size is obviously important since the make-up of the book of business will drive the number of service and production personnel. The staffing information illustrated in the graph is based on full-time equivalents (FTE). This item not only illustrates what the service staff to producers for commercial lines ratio is today, but it also shows how it has changed in 10 years. View Ratio of CL Service Personnel to CL Producers		MarshBerry.com Discussion Groups Question of the Week: What impact will the results of the Massachusetts Senate race have on a National Healthcare program? What impact will a National Healthcare program have on the Independent Agency System? How have the current economic conditions impacted your plans for perpetuating internally? From this point forward (January 2010), how much longer do you believe the soft market will last? Go to Discussion Groups   Get an Estimate of Your Agency's Value!

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