Free confidential appraisal · Queensland
A worked example, step by step
How a Queensland business is priced, line by line: adjusted earnings, the multiple, and the working behind the number.
Free confidential market appraisal. No charge before we meet or after. Last updated 15 September 2026.
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Say you run a business showing a modest profit on paper. Here is how the true picture can look once it is done properly. The figures below are purely hypothetical round numbers chosen to show the method. They are not real, not typical, and not a guide to what any particular business is worth.
From tax profit to selling price
| Line item | Amount |
|---|---|
| Net profit on the financials | $200,000 |
| Add back: owner's wage | + $100,000 |
| Add back: personal vehicle and expenses | + $20,000 |
| Add back: one off legal cost last year | + $10,000 |
| Adjusted earnings | $330,000 |
| Multiple applied (hypothetical) | × 3 |
| Indicative business value | $990,000 |
| Plus stock at value, at settlement | + SAV |
Hypothetical example only, using round numbers to show the method. These are not real figures and are not a guide to any particular business. Your adjusted earnings, your multiple and your asset position are specific to your business, your industry and the market at the time. This is exactly what a market appraisal works out for you.
Notice what happened there. In this hypothetical, the business looked like it earned $200,000, but its true earnings were $330,000 once the legitimate add backs were counted. On the same multiple, missing those add backs would have understated the value by several hundred thousand dollars. This is the single most common way owners leave money on the table, and it is why the earnings figure matters as much as the multiple.
Now the part that takes judgement
Put your figures in above and this fills itself in. The arithmetic is the easy half. What a buyer multiplies those earnings by is the half that decides your price.
Those three columns are the same business with the same earnings. The only thing that changed is the multiple.
Nothing here is stored and nothing is sent. It runs in your browser and it disappears when you close the tab. There is no form and no email required to use it. The columns above illustrate how much the multiple matters. They are not an appraisal of your business, because an appraisal takes your actual figures, your industry and the things a buyer will test. That one is free too.
Add backs: what goes in, what comes out, and what a buyer refuses
| Item | Treatment | What has to be behind it |
|---|---|---|
| Owner’s wage above the market rate for the work done | Added back, to the extent of the excess only | Evidence of the market rate for the role, and the hours actually worked |
| Owner working unpaid or below the market rate | Deducted, not added back | The same evidence, applied the other way |
| Superannuation above the compulsory rate on the notional market wage | Added back | Payroll records showing the split |
| Private motor vehicle running and lease | Added back | A logbook or a defensible business use percentage, and the FBT treatment |
| Private travel, personal insurances, family phone plans | Added back | Invoices, not a schedule typed up for the sale |
| One off legal or consultancy costs | Added back | The matter file, the invoices, and evidence the matter has concluded |
| Related party rent above market | Added back | Independent evidence of market rent for the premises |
| Related party rent below market | Deducted | The same evidence, applied the other way |
| Wages for a family member who does not work in the business | Added back | A position description, timesheets, and what happens to the role on sale |
| Interest on owner loans | Added back | The loan agreement and the Division 7A position |
| Depreciation on assets not used in the business | Added back | The asset register |
| A working director’s wage in a business that needs a working director | Refused | Nothing supports it. The cost does not disappear because the person changes. |
| Marketing spend that produced the revenue | Refused | Nothing supports it. A buyer will not add back the advertising and keep the sales. |
| Repairs recharacterised as one off in an asset heavy business | Refused where a three year pattern exists | Three years of the repairs and maintenance ledger |
| Bad debts written off in one year but recurring across three | Averaged, not added back | Three years of the ledger |
| Government support payments | Deducted, not added back | The payment records and the years they fell in |
| Any adjustment with no ledger line behind it | Refused | A general ledger entry. A buyer’s accountant works from the ledger. |
| Income that was never declared | Refused | Nothing can support it. It is a disclosure problem under section 18 of the Australian Consumer Law and a tax problem for you. |
No Australian regulator publishes a list of permitted add backs, and this table describes what a buyer’s accountant will test rather than a published rule. What the professional standard does require is documentation: APES 225 paragraph 6.1 requires working papers recording the work performed, “including the basis on which, and the method by which, any calculations, determinations or estimates” were made. What separates a schedule that survives a bank or an ATO review is not the items chosen. It is whether the basis for each one is recorded and supportable.
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