ORDENNE editorial · 7 November 2026 · Educational analysis
Our view: underwrite cash, not a label.
EBITDA can help organise a discussion about operations before interest, tax, depreciation and amortisation. It does not settle how much a buyer can withdraw. Two companies with the same EBITDA can have very different equipment needs, collections, tax payments and dependence on the owner. A multiple without that context can look precise while answering the wrong question.
Build a bridge with evidence.
Start with the reported measure and identify the period, source documents and adjustments. Examine operating cash conversion, non-recurring items and expenses that will continue after a sale. Then account for cash tax, maintenance investment and additional working capital. Each adjustment should have a reason and supporting evidence, rather than a favourable round number.
Separate investment income from the owner’s job.
If earnings rely on a working owner whose salary is absent or below a supportable replacement cost, make the relevant adjustment. If a suitable manager is already fully expensed, do not deduct the same cost again. A buyer intending to work full-time should still distinguish compensation for that work from a return on invested capital.
Check the timing of receipts and payments.
Sales booked near year-end may not yet be collected. Inventory growth may consume cash even when profit rises. Supplier terms may temporarily flatter cash flow. Review bank records, aged receivables, payables and inventory alongside financial statements. The amount of cash available at completion is a separate transaction question.
Turn the bridge into a question list.
Ask which deductions recur, what capital expenditure can genuinely be deferred and what would change under new ownership. If a cash bridge cannot be supported, leave the return metric unconfirmed. A blank figure with a clear evidence request is more useful than a polished percentage built on unexplained adjustments.
Sources and scope
Sources support the referenced concepts or tools. Numerical examples and editorial judgments are ORDENNE’s own; they are not source estimates or UAE market-return benchmarks.
Make the assumptions visible.
Use your own numbers. The calculator assumes constant annual cash flow, no debt and no change in cash flow; it does not measure suitability or guarantee a result.
Compare your investment assumptionsBoth business ownership and property can lose capital. Consider liquidity, concentration, operating responsibilities and independent advice for your circumstances.