Demystifying Financials: What Buyers Really Look For

Written By Ben Guthmiller

Thinking about selling your business — or just curious what it might be worth? You don’t need an MBA. But you do need to know which numbers matter.

At Axiom Capital Group, we work with owners of essential, cash-flowing businesses who want to take chips off the table, preserve their legacy, and partner for the next stage of growth. That journey starts with understanding your financials.

Here are the five metrics buyers actually care about — and why:

1. EBITDA: Your Baseline

What it is: Profit before interest, taxes, depreciation, and amortization
Why it matters: It shows how much money your business really makes. Clean, adjusted EBITDA is the foundation of any valuation.

2. Gross Margin: Your Strength Signal

What it is: Revenue minus direct costs (labor, materials, etc.)
Why it matters: Strong margins mean you have pricing power and room to grow. Weak margins? That’s a red flag for buyers.

3. Revenue Quality: Predictability = Value

What it is: The mix of recurring vs. one-off revenue
Why it matters: Recurring income (contracts, service plans) is far more valuable than one-and-done jobs.

4. Working Capital: The Deal-Maker or Deal-Breaker

What it is: Cash needed to run the business (current assets minus liabilities)
Why it matters: Poor collections or bloated inventory can hurt cash flow and drag down value.

5. Add-Backs: The Hidden Gold

What it is: Personal or one-time expenses added back to reflect true profit
Why it matters: Your business might be more profitable than your tax return suggests — but only if the numbers are clean and credible.

Quick Guide: Financial Acronyms (No Jargon, No Judgment)

  • EBITDA: Earnings before interest, taxes, depreciation, amortization

  • COGS: Cost of goods sold

  • Gross Margin: (Revenue - COGS) ÷ Revenue

  • Working Capital: Current assets - current liabilities

  • Add-backs: Adjustments to reflect true, normalized earnings

Bottom Line

You don’t need to master financial modeling. But when you understand the numbers that matter, you’ll have more control, better options — and stronger outcomes.

At Axiom, we help business owners bring their financial story into focus — so buyers see the full value of what you’ve built.

Ben Guthmiller
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