business return
Matt Fox avatar
Written by Matt Fox
Updated over a week ago

Business Return is our take on Return on Capital Employed for small businesses. It's like an internal rate of return for business owners to see if their sweat, time and money are worth being invested in their business.

It's calculated by taking the EBITDA (net profit before interest, tax, depreciation and amortisation) less dividends, for the current period, and dividing that figure by an assumed valuation of the business, based on EBITDA for the current period.

If the an amount is entered for market rate salary for business owners(s) role(s) then this amount will be used instead of the dividends amount. You can learn more about market rate salary for business owners(s) role(s) here.

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If you select a finalised month (see red square above) that isn't the financial year end then the figures will be annualised for the current financial period.

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The little coloured number in the lefthand corner is the percentage points difference in the business return between now and the previous financial year.

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