EBITDA vs. SDE

If you are looking to buy or sell a business, understanding the terms Earnings before Interest, Taxes, Depreciation, & Amortization (EBITDA) and Seller's Discretionary Earnings (SDE) can help you decipher the "multiples" commonly referred to by a broker, lender, or other financial advisor. Below is a snapshot I created as a quick reference guide based on my experience valuing over 1,000 companies over the past 10 years.