article thumbnail

The 2023 AICPA Business Valuation Conference and One Thought on Valuation Adjustments

Chris Mercer

I have heard many appraisers suggest that one should not normalize owner compensation when valuing minority interests “because the minority shareholder cannot change compensation.” Travis Harms and I cover the topic of normalizing adjustments in our book, Business Valuation: An Integrated Theory Third Edition , on pages 117-123.

article thumbnail

Seller’s Discretionary Earnings Explained

Viking Mergers

as well as, “How does this compare to other businesses of a similar size?”. In addition to SDE, another relevant earnings measure is EBITDA. Non-operating revenue is unrelated to the business operations, such as interest revenue, rent from a property owned through the business or sale of equipment or part of the business.

EBITDA 130