Below is a sample report for Main Street Dental, a representative single-location general dentistry practice. Your report will look exactly like this — with your numbers, your practice name, and your valuation range.
Executive Summary
Main Street Dental is a single-location general dentistry practice with trailing-twelve-month revenue of $1,487,000 and stable margins consistent with the general-dentistry cohort. After reconstructing EBITDA from reported net income (adding back interest, taxes, depreciation, and amortization) and layering in the standard discretionary add-backs a buyer’s broker would recognize, the practice produces Adjusted EBITDA of approximately $312,000 — a 21.0% margin, squarely within the typical 20–25% range Practice Worth observes for single-location GP practices of this size.
Applying the DSO multiple methodology detailed in Section 4, the practice is currently valued in a range of $1,248,000 (Discount, 4.0× EBITDA) to $1,872,000 (Premium, 6.0× EBITDA), with a midpoint market value of approximately $1,560,000 (5.0× EBITDA). The final price a specific buyer will pay depends on local supply, lease terms, patient demographics, transferability of key staff, and DSO appetite in your MSA; see Section 5 for context.
How we got to $312,000
Valuation tiers (DSO methodology, practice under $2M)
Multiples applied to Adjusted EBITDA. The Market tier represents the most-probable selling price; Discount and Premium are the realistic floor and ceiling for a practice with these characteristics in a typical transaction window. DSO multiples for practices above $2M in revenue range higher (up to 8×) — see Section 7.
Methodology deep-dive, the seven common valuation methodologies, what drives the multiple, buyer-type comparisons, line-by-line add-back schedule, red flags that lower valuations, market context, practical takeaways, glossary, and references — all personalized to your practice and your P&L.
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Section 4 · Methodology
Practice Worth produces Adjusted EBITDA under the methodology a DSO, private-equity group, or sophisticated single-buyer will apply when evaluating your practice. Step one reconstructs Reported EBITDA from Net Income by reversing Interest, Taxes, Depreciation, and Amortization — standard accounting treatment. Step two normalizes owner compensation to a market-rate replacement-doctor salary; if your W-2 is already at market (as is the case for Main Street Dental), no adjustment is needed. Step three applies a curated list of sixteen discretionary add-back rules covering vehicle expense, continuing education, private club and social memberships, meals and entertainment, personal travel, owner life insurance premiums, retirement contributions that exceed the staff plan match, and similar owner-specific categories.
Each rule is applied conservatively. When a line item could reasonably be operational (e.g., “insurance” without owner-specific qualifier), it is left in the expense base rather than added back. The result is an Adjusted EBITDA figure a buyer’s broker would recognize and defend under due diligence.
Two multiple tiers apply based on revenue. Practices under $2M in revenue use a DSO small-practice tier of 4.0×–6.0× Adjusted EBITDA — tracking the corridor where single-buyer dentists and regionally-active DSOs overlap. Practices at or above $2M use the full DSO tier of 4.0×–8.0×, where national DSO consolidators compete most aggressively. Main Street Dental falls in the small-practice tier; the crossover point is explained in Section 7.
Section 5 · Comparable Transactions
Over the trailing twenty-four months, Practice Worth has observed roughly 340 dental practice transactions in the $1M–$2M revenue band. Median Adjusted EBITDA multiple in this cohort is 5.1× for single-location GP, with a 10th-percentile discount floor at 3.8× and a 90th-percentile premium ceiling at 6.4×. Multiples run higher for practices with strong hygiene leverage, associate-ready infrastructure, long lease tail, or above-average production per provider — attributes DSO buyers weight heavily.
The Practice Worth Market tier (5.0×) aligns closely with the observed median, and the Discount / Premium tiers bracket the realistic transaction corridor. Specialty practices (oral surgery, orthodontics, endodontics) trade at different multiples — see the specialty addendum in Section 9.
Section 6 · Detailed Add-Back Schedule
The schedule below documents the exact line items pulled from the profit & loss statement, the category each was assigned to, and the amount added back in the Adjusted EBITDA calculation. Your broker, accountant, or potential buyer can audit the logic directly — nothing is opaque.
Owner compensation is not added back under DSO methodology because Main Street Dental’s owner already takes a market-rate W-2. If your owner salary were above or below market, this schedule would include a normalization line for the difference.
Section 7 · Market Context
Practice value is not set by accounting alone. The Market-tier midpoint in your report is the number a typical single-buyer transaction would produce under normal conditions; the range around it captures the real variance Practice Worth sees in the field. Three factors tend to dominate where a specific practice lands inside its range.
Lease terms and real estate. A practice with a long remaining lease and market-rate rent trades toward the Premium end; a short lease, above-market rent, or a related-party rent situation (owner also owns the building) pushes toward Discount until the rent is normalized. Your report accounts for rent normalization if applicable.
Patient transferability. Practices with long average patient tenure, strong hygiene recall, and a local (not owner-personality-driven) brand transfer cleanly. Practices where patients came primarily because of the specific dentist are harder to transfer and trade closer to Discount.
Section 8 · Appendix
Adjusted EBITDA. Earnings before interest, taxes, depreciation, and amortization, with owner compensation normalized to a market-rate replacement-doctor salary and discretionary add-backs layered on top. The figure a DSO buyer, private-equity group, or a buyer’s lender will underwrite against.
DSO multiple. The Adjusted EBITDA multiple paid by Dental Service Organizations and comparable consolidator buyers. Typical range is 4.0×–6.0× for single-location practices under $2M in revenue and 4.0×–8.0× for practices at or above $2M. Main Street Dental falls in the small-practice tier.
SDE (Seller’s Discretionary Earnings). An alternative earnings measure that adds back the owner’s full compensation rather than normalizing it to market rate. Used when the expected buyer is another owner-operator dentist rather than a DSO or consolidator. SDE multiples are lower (typically 2.5×–4.0×) because the earnings base is larger. You can request an SDE-mode report inside the Practice Worth wizard if that scenario fits your sale context better.
Discount / Market / Premium tiers. The realistic selling-price corridor for a practice with your operational characteristics. Most transactions close within this range.
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