Less Rent if not deducted
See Inputs for general instructions. This cell should be used when the business owns the Real Estate (RE). It allows the user to segregate the real estate value from the business value. Segregating business value and real estate value is a good practice. Total value of the business will then be the sum of
a) its value without RE, and
b) the value of the RE.
Segregating RE value from the business value would generally result into higher total value. This is a result of higher multiples for real estate.
• Enter fair market rent in this cell if EBITDA in the EBITDA cell is calculated without rent expense.
• If the amount entered here is positive, it reduces Final Adj. EBITDA.
• Amount entered in this cell is used as a rental income while calculating Real Estate financials. Please, remember BVX does not value the real estate. However, BVX calculates complete financials for the real estate investment when the user activates the Real Estate feature in the Advanced Features. Real Estate financials include real estate income statement, balance sheet, cash flow and Real Estate ROE.
This cell is often used, when the same person owns both the real estate and
the business. It helps analyze the impact on total business value by changing
the amount of rent to the new buyer. Total business value is the sum of
business value w/o RE, plus the RE value.