A car wash multiple describes a relationship between a defined price and a defined earnings stream. It is useful only after the transaction, period, property and owner-work assumptions are understood. This workbook makes those comparisons visible; it does not supply a New York market multiple.
Start with the valuation question
Write down the valuation date, interest being considered and what the price includes. Operating assets before debt, equity interests after debt, and a business together with its real estate are different subjects. Identify whether inventory, working capital, equipment leases, customer obligations and excluded assets are inside the stated price. Record the source and date of the actual agreement or reliable transaction evidence.
The IRS business-valuation guidance describes the importance of the interest, valuation date, relevant information and appropriate approach. It discusses market, income and asset approaches and matching benefit streams with valuation inputs. It is guidance for IRS valuation work, not a database of New York wash sales or a prescribed acquisition multiple. Read the IRS valuation guidance.
Build an evidence row before calculating a ratio
Use a unique anonymous ID for each observation. Record whether it is a completed transaction, an asking price or an unverified report. Add the wash format, site count, annual earnings period, source reference and your reason for selecting it. An asking price can be useful negotiation context, but it is not evidence that a buyer paid that amount. An unspecified transaction date cannot establish conditions as of your valuation date.
Choose one common annual earnings definition, price convention and property/occupancy basis. Copy those exact labels into rows that actually meet them. The tool excludes rows with different labels from the selected statistics. This is a consistency check, not document verification: giving incompatible records the same label does not make them comparable.
Seller discretionary earnings may include compensation for one working owner. Managed operating earnings must account for the continuing work of management. Compare the earnings and add-back schedule and owner replacement labor plan before choosing the denominator. Keep rent in a business-only case on a documented occupancy basis. Do not add property value to a price that already includes it.
Make each adjustment visible and debatable
A signed price adjustment and a signed annual earnings adjustment affect different sides of the ratio. Give each a separate ID, destination, rationale and evidence reference. Keep the unadjusted record available. An adjustment remains your analytical assumption even if you have entered a reference. Do not use a balancing adjustment merely to produce a preferred multiple.
The equations are adjusted price = recorded price + signed price adjustments; adjusted annual earnings = recorded annual earnings + signed earnings adjustments; ratio = adjusted price ÷ adjusted annual earnings. A missing price or a zero, negative or unknown earnings denominator produces no ratio. A negative adjusted price is rejected. Currency amounts are rounded to cents; ratios retain precision for calculation and display to two decimal places.
Worked fictional comparison
| Record | Price / annual earnings | Ratio | Use in selected set |
|---|---|---|---|
| Completed business-only A | $900,000 / $300,000 | 3.00× | Selected on the declared common basis |
| Completed business-only B | $1,400,000 / $350,000 | 4.00× | Selected on the declared common basis |
| Asking-price record | $2,100,000 / $300,000 | 7.00× | Excluded: asking only |
| Property-included transaction | $2,400,000 / $400,000 | 6.00× | Excluded: different occupancy/property basis |
These invented rows give two selected observations, a minimum of 3.00×, median of 3.50× and maximum of 4.00×. They do not establish a market range. With one selected row, the three statistics repeat that observation; with none, the workbook reports insufficient evidence. A small or selectively assembled sample cannot establish how the whole market trades.
Keep subject sensitivity independent
The subject section requires independently supported annual earnings and three multiples entered by you. The comparable median never fills these inputs. In the fictional case, $280,000 at 3.00×, 3.50× and 4.00× produces $840,000, $980,000 and $1,120,000. If $20,000 of earnings is disputed, its impact at an entered 3.50× is $70,000. That quantifies the assumption; it does not approve the adjustment.
Negative subject earnings withhold this positive-multiple sensitivity. Zero earnings yields zero and signals a limitation of this method, rather than a conclusion that assets have no value. Missing earnings support also withholds the output. Use the valuation-method comparison to identify where another approach or professional analysis is needed.
Use the evidence in the next decision
Take the row-level exclusions, source list and disputed adjustments into a discussion with the appropriate valuation and transaction advisers. Follow the valuation workflow for sequencing and the New York evidence map for local issues. Test purchase funding with the acquisition cash-flow tool, and translate an offer into seller proceeds separately.
The blank CSV provides a row-oriented evidence register. The fictional CSV uses section, record and field labels so you can reproduce every example input without importing confidential documents. Local exports include your entered assumptions, exclusions and result tables. Review changed documents or scope before reusing a saved result.
Download the blank evidence register
Download the fictional teaching case v1
Sources and scope
Official and original sources checked October 17, 2026. These sources support the identified rules and methods; they do not verify a particular business or property.
- Internal Revenue Service — Business valuation guidelinesIRS valuation method context; not a car wash sale database or market multiple.
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Verify the revenue · Normalize earnings · Model the cash flow