THE SHORT ANSWER
Reconcile tire sales, service revenue, direct costs, overhead and supported supplier rebates before evaluating earnings. Define owner work and which stock, equipment and premises the proposed value includes. Per-job contribution is different from annual SDE, EBITDA and usable cash. No universal tire-shop multiple or automatic percentage adjustment follows from a formula or operating history.
Separate merchandise from service economics
Use actual item and job records to connect sales with tire cost, discounts, returns and installation work. Check whether service is charged separately or included in the selling price. Review rebate eligibility, timing and accounting treatment rather than adding an entire proposed incentive to current earnings.
Reconcile collected fees and disposal-related charges with the actual treatment and costs. Illinois EPA distinguishes the retailer user fee from tire disposal cost.
(Illinois EPA: used-tire retailer and storage guidance)That state-specific guidance does not determine this company’s accounting or valuation. Have the accountant review recorded obligations and consistent periods.
Understand contribution without calling it annual earnings
| Invented transaction-group bridge | Amount |
|---|---|
| 20 tires sold at an assumed $180 each | $3,600 |
| Assumed tire cost: 20 at $110 each | −$2,200 |
| Tire gross profit under this classification | $1,400 |
| Separately charged installation service | $500 |
| Specified variable installation labor | −$300 |
| Contribution after these specified costs | $1,600 |
A high tire volume can still leave little after overhead. Do not multiply this selected group into an annual forecast without evidence about the full service mix, costs, capacity and timing.
Reconcile earnings and the owner’s actual duties
Use the earnings basis guide and supported adjustment records. Identify owner production, ordering, scheduling and management, plus any replacement costs required by the buyer’s operating model.
SEC guidance addresses recurring expenses and adjusted measures in issuer reporting.
(SEC: non-GAAP financial measure interpretations)Use it as a presentation reference with accountant review of this private-company schedule. Personal vehicle loan principal, a capital renovation and owner withdrawals are not automatically deducted operating expenses available to add back. Distinguish tax-return income from a fully reconciled earnings measure.
Define stock and equipment in the indicated value
Specify owned stock, consigned items, waste handling, equipment ownership and separately treated property. Use a dated physical count, condition review and agreed inventory definition; book cost is not a guarantee of realizable value.
SBA sale guidance addresses asset/liability scope and the written agreement.
(SBA: closing or selling a business)Check whether equipment and normal operating inventory are already included before adding them to an earnings-based value. Use the working-capital worksheet to reconcile agreed treatment.
Choose scenario assumptions from relevant evidence with consistent metrics and asset scope. No 2.0–3.5x range, $2-million metric threshold, ±15% adjustment or certified appraisal is established by this guide or its tool.
Owner questions
Is tire gross profit the same as shop SDE?
No. Reconcile service results, overhead, owner work and supported adjustments.
Is book inventory guaranteed extra purchase price?
No. Review ownership, condition, agreed treatment and what the value already includes.
Does ten years of operation assign a higher multiple?
No. Evaluate current evidence and relevant comparison scope rather than an age-based formula.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- Illinois EPA: used-tire retailer and storage guidance
Illinois-specific retailer, storage and transporter responsibilities; user fees and disposal costs are distinct. Confirm actual operations and current applicable rules with the agency and advisors; not a nationwide permit or transfer checklist.
- SEC: non-GAAP financial measure interpretations
Staff interpretations last updated December 2022: recurring operating costs and distinguishing EBITDA from adjusted measures. SEC reporting context, not a universal private-sale rule or automatic acceptance of add-backs.
- SBA: closing or selling a business
Valuation approaches, sale agreements, assets and ownership transfer.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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