Mazzoni on Distributorship Values

"Gross profit multiples do not signify value. Gross profit is a component of value." So says consolidation consultant Mike Mazzoni to the California Beer and Beverage Distriubutors annual convention. Mike said that he is "mystified" by why we rely upon multiples of gross profit to describe the value of brands or distributorships, when value is always just a function of cash flow. Besides, GP is "controlled by suppliers....that you don't even know anymore." Mike prefers a multiple of EBITDA (earnings