The assessment of these factors can be achieved through the assession of the Economic and the Qualitative factors of the company.

A. Assessment of Economic Characteristics:

As "Earnings", we are using those called Seller’s Discretionary Earnings (SDE), which are calculated as follows:

1. In the beginning we calculate the Earnings before Taxes (EBT) of the Typical Fiscal year.
   [As a Typical Fiscal Year, we determine that year in THE FUTURE in which the company acts normally, without exceptional expenses or revenues.
   In the case that we cannot determine the Typical Fiscal Year's figures, we can use the Average of the last 3-5 years. (If a year is exceptional, it is better to extract from the calculation of the average]. 
   EBT = Sales' Revenue (without VAT) minus Costs & Expenses (without VAT).
   Instead of calculating the EBT, we can use the average of Code 571 in accounting "Document E3", Page 2, for the last 3-5 years.
2. From the EBT, in order to reach to the SDEs, we follow:
   1. We ignore all the Expenses which are related to Personal Expenses of the Owner and are included in the EBT calculation (thus, we are registering them to relative boxes). Insurance, Travel, Restaurants, Retired Programs, Charities, etc, are expenses of this category. IMPORTANT NOTICE! These types of expenses are presented analytically on the "Document E3".
   2. In case that in the company are employed Family Members of the Owner and their wages are included to Company's date, we have to examine if these wages differs from the Average tin the Market. If YES, we have to register the difference between the Average Market Wage and the Company Wage. Thus, if Company Annual Wage is €14.000 and the Average Wage of the Market is €8.000, we register the difference €8.000-€14.000=-€6.000. IMPORTANT NOTICE! We register minus €6.000 (with the negative sign).
      (Social Security Expenses are included to the Annual Wages).
      This calculation is repeated for any Family Member which is employed in the company.
      In case that the owner of the company is employed into the company, and his wage is already included into Company's Expenses, then his annual wage, should be register to the relative box, with negative sign.
   3. In case that the company is lodging in a building of the entrepreneur, we have to examine if Rent which fas included to the Company's Expenses differs from the Average Rent of the Market. Thus we register the difference between the Average of the Market and the Paid Rent. In case that the current company Rent is €10.000 and the Average Rent of the Market is €20.000, we register €20.000-€10.000=+€10.000. IMPORTANT NOTICE! we register the figure with possite sign. 
   4. We ignore Depreciations and Interest Expenses and any non-cash expenses (thus we register on the relatively boxes).
      For the Depreciations, we register the average of the sum of figures on 541, 542 & 543,  on 2^η page of του Document Ε3 for the last 3-5 years (or for the last year, if we estimate no huge differences). 
      For Interest Expenses we follow the same procedures with the Depreciations, bus for the figures of code 537, 538 & 539 of Document E3.
   5. Finally, we forecast the necessary annual Investments, which will keep the company efficient to bring the estimates Sales of Typical Fiscal Year. Thus, if a cafeteria, needs a renovation cost of €40.000 every four years, we register €40.000/4=€10.000

Completing these steps, we reach to those Earnings (SDE) that when we multiply with the appropriate Multiplier, we reach to the Value of the Company.

B. Determining the appropriate SDE multiplier

The determination of the Multiplier with which we will multiply the SDE, depends on factors, that affect the level of the risk of a company. 

In our analysis and for simplicity reasons, we are going to use the correlation curves between SDE and Multipliers, from an international statistical sample (next graph).

These factors affect the relation between return and risk for the Buyer. Whatever increases the return or reduces the risk, increases the value, and vice versa.

• Industry prospects (increasing, stable, decreasing).
• Competition (increasing, stable, decreasing).
• Profitability comparableness (lower, equal or larger from the industry).
• Attractiveness of the kinf of employment (difficult, acceptable, desired employment).
• Attractiveness of the activity (large, medium, low Establishing Cost & large, medium, low level of Fixed Assets & activity in Manufacturing, Commerce or in Service).
• Organizational Structure and Operation (a. capability of the working team, b. quality of relationship with clients/suppliers, c. clients/suppliers dispersion, d. necessity of owners involvement into the daily operation).
• Location (non-acceptable, acceptable, satisfactory).
• Attractiveness for Buyers (are needed crucial, ordinarily or no special capabilities, that effects the number of Buyers).
• Fixed Assets situation and Renewal needs (good, medium and fair Fixed assets Situation and high, medium or low Renovation Need).
• Attractiveness of transaction terms (100% cash, both cash and arrangement, 100% arrangement).

The determination of which curve to follow in order, in relation to the SDE level, to determine the Multilier which we are going to use, occurs automatically.

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