EBITDA calculator
Buyers and lenders price a small business on its EBITDA or owner earnings, not on its tax return profit. Enter your profit and loss. See all three numbers.
EBITDA, adjusted EBITDA and SDE
EBITDA is earnings before interest, taxes, depreciation and amortization. It shows what the operation earns before financing choices and accounting charges.
Small businesses are usually sold on owner earnings, also called seller's discretionary earnings (SDE): EBITDA plus everything the owner takes out of the business and any one-time or personal costs. Bigger companies use adjusted EBITDA, which pays the owner a market salary first.
Work you can look at
Questions people ask
What is the difference between EBITDA and SDE?
SDE adds back the owner's entire pay and perks, so it shows what one owner-operator could take home. Adjusted EBITDA first pays a manager's salary, so it shows what the business earns for an investor.
Which add-backs will a buyer accept?
Ones you can document: one-time expenses with invoices, personal costs with receipts, and an owner salary visible in payroll. Add-backs a buyer cannot verify tend to be ignored.
Where do I find these numbers?
On your profit and loss statement and your tax return. Your bookkeeper or accountant can pull interest, depreciation and the owner's pay for you.
Is this financial, legal or tax advice?
No. It is a free estimate to help you plan and to start a conversation with your lender, accountant or advisor. Check the real figures with them before you decide.
More free tools
SDE Calculator (Seller's Discretionary Earnings)Debt Service Coverage Ratio (DSCR) CalculatorBusiness Sale Tax CalculatorWhat is my business worth?
This is an estimate for planning, not financial, legal or tax advice.