Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated September 1, 2026.
1. Reconcile the reported earnings
Begin with financial statements that tie to tax returns, bank activity and practice-management reports. Production, adjustments and collections should reconcile well enough to explain timing and write-offs. A buyer or valuation professional will discount numbers that cannot be traced.
- Three years of financial statements and returns
- Production, adjustment and collection reports
- Accounts-receivable aging
- Provider and location detail
2. Support every normalization adjustment
Owner-specific costs, one-time expenses and non-operating items may be add-backs only when the documentation and transaction context support them. Owner clinical compensation also matters: replacing a producing dentist has an economic cost, even when reported profit does not show a separate market-rate paycheck.
- Documented owner-specific expenses
- Nonrecurring costs with invoices and explanations
- Replacement-dentist compensation
- Related-party rent or management charges
3. Apply a range that belongs to this practice
Risk, growth, provider dependence, location, payor mix, lease terms, systems and transferability all affect a valuation range. Taxstra’s calculator deliberately requires the user to supply low and high multiples; it does not assert a standard dental multiple.
- Provider and referral concentration
- Lease duration and assignability
- Team retention and operating systems
- Equipment condition and capital needs
4. Bridge enterprise value to equity value
Enterprise value describes the operating business before the debt and excess-cash bridge. Equity value adjusts that range for the transaction’s assumed debt and cash treatment. Purchase-price allocation and deal terms can change the tax result even when the headline price stays the same.
- Debt assumed or paid at closing
- Excess cash retained or delivered
- Working-capital expectations
- Asset allocation and transaction costs
Questions owners ask
How much is a dental practice worth?
It depends on normalized earnings, risk, transferability, market evidence and deal terms. A single collections percentage is not a substitute for practice-specific work.
What is the difference between enterprise value and equity value?
Enterprise value measures the operating business before the agreed debt and excess-cash bridge. Equity value reflects that bridge and is closer to the owner-level value before taxes and transaction costs.
Does Taxstra provide a certified dental practice valuation?
This guide and calculator are educational readiness tools. A certified or formal valuation requires a separately defined engagement with a qualified valuation professional.