The NTM multiple refers to the multiple that would be applied to the next twelve months of a particular financial measure such as revenue, EBITDA, or net income. The next twelve months projection is often used to showcase a company's immediate future performance, which is particularly relevant for companies in high growth industries of those that... Read more
An earnout is a financing arrangement for the purchase of a business in which the seller finances a portion of the purchase price, and payment of this amount is contingent on achieving a predetermined level of future earnings. An earnout is often used to bridge a valuation gap. The seller only gets paid if the predetermined level of future EBITDA or other financial targets are achieved.
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