GROFINEX

BUSINESS EARNINGS

Seller’s discretionary earnings (SDE) calculator

Rebuild owner-operated business earnings from pre-tax profit and documented adjustments.

Your scenario

All amounts are in US dollars. Start with the example, then enter your numbers. Results update as you type.

Before income tax, after expenses. Losses are allowed. No income-tax add-back is needed.

Include only deducted salary, benefits and employer payroll costs. Exclude draws and distributions; include each expense once.

Positive if recorded rent is above market; negative if below market.

Needed to compare owner-operated earnings with manager-run earnings.

Calculation inputs stay in this page’s memory and are not submitted as a lead. Requesting contact is a separate step.

ILLUSTRATIVE EXAMPLE

See what the numbers say.

Seller’s discretionary earnings
$290,000.00
Total net adjustments
$140,000.00
Manager-adjusted operating earnings
$210,000.00
Before debt, capital spending, working capital, and buyer income taxes.

Estimates, not quotes, approvals, appraisals or guaranteed returns.

How this calculator works

Unadjusted EBITDA = pre-tax profit + interest + depreciation + amortization. SDE adds one owner’s deducted compensation and net normalization adjustments. Normalized EBITDA subtracts replacement manager cost from SDE.

Assumptions to check

  • EBITDA means earnings before interest, taxes, depreciation and amortization. This tool begins before income taxes; sales, property and ordinary payroll taxes remain operating costs.
  • Support adjustments with records. Do not add back loan principal, owner draws, distributions or recurring costs. Earnings are not cash available after financing, reinvestment and buyer taxes.

Method reference: bizbuysell.com. Independent GROFINEX implementation.