When assessing the value of a small business for sale or purchase, accurately determining its profitability is crucial. One of the key metrics used in this assessment is Seller's Discretionary Earnings (SDE). SDE provides a clearer picture of a business's financial health by adjusting its earnings to reflect its true earning power. This video explores what is SDE, what common EBITDA add backs are, and how to calculate them using a typical SDE calculator template.

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00:00 Introduction
01:24 SDE SDE Calculator Template Overview
01:55 Typical AddBacks to SDE: Owner's Compensation
03:15 Personal Expenses
03:40 NonCash Expenses
04:15 OneTime or Exceptional Costs

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ProjectionHub has helped more than 50,000 founders and entrepreneurs to create financial projections so they can raise investment, apply for loans, and plan for expansions/growth. From budgetfriendly DIY financial projection tools to hightouch custom consulting with a CPA expert, ProjectionHub has the financial forecasting solutions your business needs.