How GradeThisDeal scores a business acquisition
GradeThisDeal scores a business acquisition 0–100 by combining four weighted dimensions — Valuation (25%), Financial health (20%), Market-specific risk (25%) and Qualitative (30%)— against earnings-multiple bands calibrated to the deal's market, then stress-tests fair value with a seeded 4,000-run Monte Carlo simulation. A score of 78 or above reads Strong Buy; below 35 reads Pass.
The architecture: one engine, per-market data
The scoring engine is fixed code; every market is pure data. A market configuration carries its currency, sector multiple bands, financing presets, and which of eight reusable risk primitives apply: transfer structure, lease runway, licence portability, foreign-ownership caps, employee transfer, owner work-pass risk, government-contract/grant dependence, and labor quotas. No market-specific constant lives in engine code — which is what lets every figure below carry a source and a verification date.
Key terms
- SDE (seller's discretionary earnings)
- EBITDA plus one full-time owner's salary and discretionary expenses — the earnings basis for small, owner-operated businesses.
- EBITDA
- Earnings before interest, taxes, depreciation and amortisation — the basis for larger, management-run businesses.
- Multiple band
- The low–high range a sector trades at (e.g. 1.5×–2.5× SDE for Singapore F&B), sourced per market and date-stamped.
- GradeThisDeal Deal Score
- The 0–100 composite across the four dimensions, after quality adjustments and market-risk penalties.
- DSCR (debt-service coverage ratio)
- Earnings over annual debt service for the chosen financing preset; flagged below 1.5 and strongly below 1.25.
- Data confidence
- A meter that drops whenever an input is marked unknown — the engine substitutes a conservative assumption and says so, rather than fabricating a value.
Scoring mechanics
- Quality multiplier — recurring revenue, customer concentration, owner dependence and books quality move the multiple applied, not just the score.
- Basis by size — small owner-operated deals are valued on SDE; larger deals shift to EBITDA, with the band adjusted accordingly.
- EV → equity bridge — net debt and working-capital adjustments convert enterprise value to what the buyer actually pays.
- NAV floor — a business is not worth less than its orderly net asset value; the valuation range respects that floor.
- Revenue/ARR path — high-growth software with strong retention is valued on an EV/Revenue band (Rule-of-40 and NRR aware) instead of earnings multiples.
- Monte Carlo — 4,000 seeded (reproducible) simulations perturb the key inputs to produce a fair-value distribution, not a single point estimate.
- Earnings normalisation — grant income and government-contract revenue are discounted as non-recurring before any multiple is applied.
| Deal Score | Verdict |
|---|---|
| 78–100 | Strong Buy |
| 65–77 | Favourable |
| 50–64 | Conditional |
| 35–49 | Caution |
| 0–34 | Pass |
Calibration and sources
A market is labelled calibrated only after its multiple bands, financing presets and risk rules have been verified against primary sources, and it carries the verification date. Everything else runs light-touch: a default band, neutral risk primitives, and a hard cap on data confidence so the output can't overstate what we know.
Singapore — last verified 2026-06
- https://www.mom.gov.sg/passes-and-permits/work-permit-for-foreign-worker/foreign-worker-levy/levy-and-quota-requirements
- https://www.mom.gov.sg/passes-and-permits/employment-pass/eligibility
- https://www.mom.gov.sg/passes-and-permits/s-pass/eligibility
- https://www.gebiz.gov.sg/
- https://www.ura.gov.sg/
- https://bizlah.com/
- https://pages.stern.nyu.edu/~adamodar/
- https://argos-wityu.com/argos-index/
- https://www.bakermckenzie.com/
- https://www.iras.gov.sg/
United States — last verified 2026-06
Light-touch markets currently supported: Australia, France, Indonesia, Malaysia, United Arab Emirates, United Kingdom, Vietnam. Singapore sector bands are mapped to ACRA's SSIC 2025 taxonomy; subsectors with no public transaction comp are labelled “(est.)” in the UI and on the valuation-multiples pages.
Limitations
GradeThisDeal is a screening tool, not financial, legal or tax advice, and not a formal valuation. Multiple bands are indicative ranges, not predictions for a specific deal. Reference figures drift, so every market is date-stamped and flagged when stale — verify against primary sources and professional advisers before committing capital.