Project the return on your capital.

Methodology

How the ecommerce acquisition return model works

Yield turns a user-defined acquisition scenario into monthly cash flows, a terminal value, return multiple, and annualized internal rate of return (IRR).

Inputs used

• Capital deployed, entry SDE multiple, and hold period
• Cautious, balanced, or aggressive risk profile
• Modeled operating uplift and annual SDE distribution rate
• Tax drag and annual management fee

Formula and logic

1. Base annual profit = capital deployed ÷ entry SDE multiple.
2. Modeled operating uplift ramps linearly across the hold period and is reduced by the selected risk profile's realization factor.
3. Monthly cash flow = after-tax SDE distribution minus the monthly management fee. The after-tax terminal sale is added once to the final monthly cash flow before the same series is aggregated for the annual chart.
4. Terminal value = final annual profit × the selected profile's terminal multiple, after the entered tax drag.
5. Total proceeds = distributions + after-tax terminal value − management fees. IRR is solved from the monthly cash-flow series and annualized.

Assumptions

• Cautious, balanced, and aggressive profiles realize 55%, 70%, and 85% of modeled uplift and use 3.4x, 3.1x, and 2.8x terminal SDE multiples respectively.
• Distributions are monthly, uplift ramps evenly, and the terminal sale happens at the end of the selected hold.
• The user controls the entry multiple, distribution rate, tax drag, and management fee; defaults are scenario inputs, not forecasts.

Hypothetical worked example

This is a hypothetical input set for arithmetic transparency. It is not a transaction, comparable sale, forecast, market average, or promised outcome.

Capital / hold

$1,500,000 / 36 months

Scenario

Balanced; 3.0x entry; 25% modeled uplift

Structure

75% distribution; 25% tax drag; 2% annual fee

Modeled proceeds

$2,195,566

Modeled return

1.46x

Modeled annualized IRR

17%

Limitations

• The model excludes acquisition debt, interest, working capital, transaction costs, inventory funding, cash-flow timing inside each month, and changes to the terminal multiple beyond the selected profile.
• It is not an investment recommendation, capital commitment, or forecast of an actual acquisition.

Data and source vintage

This is an assumption-driven cash-flow model, not a live market-data product. Profile constants and formulas come from the current executable model and were reviewed on the date below; no transaction sample or market-average return is claimed.

Last reviewed: 9 August 2026