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SDE Calculator
Normalize owner-operated business earnings by adding back eligible owner compensation, interest, taxes, depreciation, amortization, and non-recurring expenses.
SDE Calculator
Enter your numbers and the result updates straight away.
Outputs
Planning estimate only. Verify assumptions before making a financial decision.
$100,000 of net income plus $120,000 of owner compensation and $30,000 of valid adjustments produces $250,000 of SDE.
How this calculation works
Every add-back should be separately documented and tested for whether a buyer would truly avoid the expense after closing.
How to interpret the result
Aggressive or unsupported add-backs overstate value. Keep a defensible adjustment schedule.
Limitations
Results are educational planning estimates. They do not include every tax, legal, accounting, financing, or business-specific consideration and are not professional advice.
Formula and example
$100,000 of net income plus $120,000 of owner compensation and $30,000 of valid adjustments produces $250,000 of SDE.
Common use cases
- Recast owner-operated earnings.
- Prepare a valuation input.
- Audit seller-provided add-backs.
SDE Calculator FAQ
Which expenses qualify as SDE add-backs?
Only expenses that are documented, owner-specific or genuinely non-recurring, and unlikely to continue under the buyer’s ownership.
Is SDE the same as EBITDA?
No. SDE commonly adds one owner’s compensation and benefits, while EBITDA usually assumes market-rate management costs remain.
How is SDE calculated?
Every add-back should be separately documented and tested for whether a buyer would truly avoid the expense after closing.
How should I interpret the result?
Aggressive or unsupported add-backs overstate value. Keep a defensible adjustment schedule.