Definition EBITDA Normalized Earnings 
Viking Mergers
MARCH 24, 2022
Seller’s Discretionary Earnings Definition. Seller’s Discretionary Earnings (SDE) is a cash-flow-based estimate of the total financial benefit a full time owner-operator derives from the business on an annual basis. SDE vs EBITDA. In addition to SDE, another relevant earnings measure is EBITDA.
Chris Mercer
NOVEMBER 15, 2022
Assume a company has reported an EBITDA of $2.0 Assume further that the appropriate EBITDA multiple is 6x and that the underlying equity discount rate is 14%. Then, based on reported EBITDA, the company is worth $12.0 Normalized EBITDA is, therefore, $3.0 million based on normalized EBITDA.
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