Maximise the value of your home for sale

Posted on April 1st, by editor in Caring Times. No Comments

|Norman Webber looks at commercial accounting and tax issues that affect values when selling a care home| The critical issue for a valuer is the assessment of the operating profit, or earnings, before deduction of interest, tax, depreciation and amortisation (EBITDA). Also, the valuation is dependent on the multiple applied to the sustainable operating profit. To achieve maximum value, one needs to maximise profits and the multiple applied. Outlined below are some of the issues that can be addressed. Grooming the business for sale It is often the case that a period of “grooming” is required to ensure that the level of operating profit shown within the historical accounts and multiple applied by the valuer is maximised. The following are some of the areas that may be involved in the grooming process: – Many residential and nursing homes are run by owner operators, where the profit and loss account may include expenditure of a private nature. An example may be motor vehicles for both the owner and their spouse.

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