How to Value Small Businesses: A Guide to Using SDE and EBITDA
Key Takeaways SDE (Seller’s Discretionary Earnings) is ideal for valuing owner-operated businesses where the owner’s salary and perks are part of the calculation. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is better suited for larger, mid-sized businesses where the owner’s compensation is excluded. The Main Difference: SDE includes the owner’s compensation and perks, while […]
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