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business-owners

What Is Seller’s Discretionary Earnings (SDE) and How To Calculate It

Definition of Seller’s Discretionary Earnings Seller’s Discretionary Earnings, or SDE, is a type of annual cash flow used to benchmark a privately owned small business profitability based on a single full-time owner operator. The net income is reconstructed to account for “discretionary expenses” which are typically owner benefits. The purpose of this financial reconstruction, or

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corporate-man

List Of Terminologies Frequently Used In Business Sale and Acquisition Transactions

Amortization A non cash expense item in the income statement for intangible assets. It is similar to depreciation which is used for tangible assets. It’s purpose is to match the capital asset’s expenses with the revenue it generates. Used in accrual accounting to match revenues. Depreciation Depreciation is the expense item in the income statement

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