# The Real Difference in EBITDA Multiplier Sale Prices Why headline-high multipliers often translate to lower actual figures. - **Source:** [Nerd's Eye View | Kitces.com](https://brifing.si/source/c3dd3d07-ecf0-4aad-94c5-a65e2173600d) - **Published:** 2026-07-20 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/bdc05472-9116-4335-8285-9c9d9b511d7e ## Liquidity Boom in Advisory Firms Low interest rates and private capital growth have increased M&A activity in advisory firms. Once illiquid, these businesses now trade at high multiples. However, headline multipliers often differ from reality due to complex negotiations between buyers and sellers. ## Nuances in Revenue Calculation Buyers only want to pay for recurring post-acquisition revenue. One-time payments and revenue-sharing arrangements are excluded. Additionally, discounts apply if clients don't accept new agreements. These adjustments can significantly reduce the initial multiplier. ## Impact of EBITDA Adjustments If founders aren't paid fair market rates, buyers impute salaries to reduce profits. Personal expenses routed through the business also affect EBITDA. These adjustments can drastically alter a firm's valuation during negotiations. ## Controversy Over One-Time Expenses Expenses like technology consultants or office transitions may be deemed recurring by buyers. Deducting these from EBITDA lowers the final multiplier. Such items frequently become negotiation flashpoints between parties. ## Headline vs. Actual Multiplier Gap A firm expecting 4x revenue might only receive 3.1x after adjustments. Similarly, 10x EBITDA could shrink to 8x. This discrepancy shows how media-reported high multipliers often don't reflect reality. ## Critical Warning for Sellers Experienced buyers meticulously scrutinize financial details. Sellers shouldn't over-rely on headline multipliers and must account for adjustments during negotiations. Realistic expectations can make the sales process more efficient. ## Sources covering this story - https://feeds.feedblitz.com/~/961041782/0/kitcesnerdseyeview~Why-A-X-EBITDA-Sale-Price-In-Headlines-Often-Really-Isn%e2%80%99t-By-The-End/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._