Interactive Tool

Medical Practice Valuation Estimator

A planning tool that estimates adjusted EBITDA and an illustrative valuation range by buyer type. It is a starting point for a conversation, not a substitute for a formal valuation.

Important: the valuation multiple bands used below are illustrative planning ranges that reflect PMC advisory experience and general observation of the market. They are not drawn from a published transaction dataset. A real valuation of your practice requires a quality-of-earnings review performed by qualified transaction advisors, and actual transaction pricing depends on factors this tool does not capture.

Estimate Your Range

Illustrative Estimate

Collections entered: $3,000,000
Adjusted EBITDA: $400,000
Illustrative multiple band: 3.0x to 5.0x
Illustrative valuation range: $1,200,000 to $2,000,000

This range is illustrative only, for group or partnership buyers, based on the adjusted EBITDA you entered and a general planning multiple band. It is not an appraisal and should not be used to set an asking price or accept an offer.

How This Works

Adjusted EBITDA starts from reported EBITDA, adds back the portion of owner compensation above a market-rate replacement physician salary, and adds any other discretionary add-backs entered. This is a standard normalization approach used in small practice transactions, though the specific figures you enter for owner and market compensation are yours to supply and are not sourced from a survey on this page.

The multiple band applied to adjusted EBITDA is illustrative and varies by buyer type, reflecting PMC advisory experience and general market observation rather than a published transaction dataset. Actual multiples in a real transaction are set through negotiation and depend on specialty growth trends, payer mix, ancillary revenue, facility ownership, physician retention commitments, and deal structure, none of which this simplified tool captures.

Questions About Practice Valuation

Is this a real valuation of my practice?

No. This tool produces an illustrative planning range only, useful for early conversations about whether a sale, partnership, or recapitalization is worth pursuing. A real valuation requires a quality-of-earnings review by qualified transaction advisors.

Where do the valuation multiples come from?

The multiple bands shown are illustrative planning ranges reflecting our advisory experience and general observation of the market. They are not drawn from a published transaction database, and we do not represent them as one. Actual multiples in any transaction depend on specialty, payer mix, growth trajectory, ancillary services, real estate, and deal structure.

Why do multiples differ by buyer type?

Individual physician buyers typically finance personally and price conservatively. Groups and partnerships often value cultural and operational fit alongside cash flow. Hospitals and health systems price for strategic and referral value. Private equity platforms typically price for scale, add-on potential, and exit multiple arbitrage, which generally supports a higher range.

What is adjusted EBITDA in this context?

It is owner compensation above a market physician salary, plus discretionary add-backs such as personal expenses run through the practice, minus any one-time items, added to reported earnings before interest, taxes, depreciation, and amortization. Buyers will scrutinize every add-back during diligence.

What is a quality-of-earnings review and why does it matter?

It is an independent review of a practice's financials, typically performed by an accounting or transaction advisory firm, that verifies revenue recognition, normalizes earnings, and tests the add-backs a seller is claiming. Serious buyers, particularly private equity platforms and health systems, will not close without one, and sellers benefit from commissioning their own before negotiating a price.

Get a Real Valuation Read

Before you engage a buyer, we can walk your financials, identify real add-backs, and tell you what a quality-of-earnings review is likely to surface.

Book a Discovery Call