The Myth:
If another business sold for 5x EBITDA, mine must be worth 5x too.

The Reality:
Multiples vary based on size, growth, margins, customer concentration, management depth, and countless other factors. A comparable sale without detailed context isn’t truly comparable.

Why It Matters:
Basing value on raw multiples without adjusting for business risk can create serious overvaluations — and big problems when it’s time to underwrite loans or finalize deals.

Practical Tip:
Use comparables only as a cross-check — never as the sole basis for setting or verifying value.