What Are Some Of The Factors That Practice Value Depends On?

Market Value
Goodwill
Interest rates
Effects of supply and demand in your area
Cash Flow
Expectation of future earnings growth, which can further be classified by:

Prospects for growth from the efficiency of operations

Expense to Gross Revenue (overhead)

Potential to increase production

Increased debt financing to invest (either inside or outside of the practice providing the investment yields a greater return than the cost of borrowed money)

The growth rate of a practice typically ranges between 0 and 20% and can be measured by a modified Return on Investment, (ROI)), as a proxy for the growth rate. Anticipation of the growth in profits makes one practice more attractive than another. An improving trend would signify increased value. It is important to know the reasons for the trend.