moonmoot

What does your business really earn for you?

Seller's Discretionary Earnings is the full annual benefit one working owner takes from a business, and it is what small businesses are valued on. This works it out from your accounts, shows every add-back, and separates commonly used adjustments from those more likely to be challenged. Enter one year of figures. Nothing is stored.

All figures annual and from the same accounting period, in your currency. Only tick the confirmation where an amount was an expense in your profit and is not counted in another field.

Profit and non-cash items
/yr
Before tax. A loss can be negative.
/yr
/yr
/yr
Primary owner
/yr
Salary/wages + employer payroll + pension/benefits, if expensed. Not drawings or dividends.
Discretionary and one-off adjustments
/yr
Personal costs run through the books, e.g. owner's car.
/yr
Non-recurring, e.g. a documented legal settlement or relocation.
/yr
Non-recurring income already in the profit, e.g. an insurance payout.
/yr
Adjustments more likely to be challenged (undocumented or recurring). Kept separate.
Owners and replacement manager
Only one owner's pay is added back; the rest are netted against a replacement cost.
/yr
Total annual employment cost: salary + employer payroll + pension + benefits. No benchmark supplied.
Pre-tax net profit0
Interest+0
Depreciation+0
Amortisation+0
EBITDA0
Owner compensation+0
Additional owners adjustment+0
Personal / discretionary costs+0
Genuine one-off expenses+0
One-off income−0
Core SDE estimate0
Challengeable add-backs+0
Owner-proposed SDE0
Core SDE uses the adjustments you marked as documented and non-duplicated. A buyer or adviser may still challenge any add-back.
Owner-proposed SDE adds items more likely to be challenged. It is your proposed figure, not a higher-confidence number.
! No owner compensation added back. If you take a salary that was an expense, add it. Drawings, dividends and distributions are not deducted when calculating accounting profit, so do not add them back.
EBITDA = profit + interest + depreciation + amortisation. Core SDE = EBITDA + confirmed owner and discretionary add-backs, netted for additional owners, less one-off income. All figures annual, one accounting period. The arithmetic runs in your browser; nothing is stored or sent.

Questions owners ask

What is the difference between SDE, EBITDA and manager-run earnings?

EBITDA is pre-tax profit plus interest, depreciation and amortisation; it keeps whatever employment costs are already in the accounts. SDE adds back one working owner's compensation and their discretionary costs, because a new owner-operator would not carry them. Manager-run earnings is a separate step: Core SDE minus the total cost of a replacement manager, for a buyer who will not work in the business.

Do I add back my salary or my drawings?

Only add back owner pay that was an expense in the profit figure. Drawings, dividends and distributions are not deducted when calculating accounting profit, so do not add them back; the money is already in profit and adding it again would double-count.

What is the difference between Core SDE and Owner-proposed SDE?

Core SDE uses only the adjustments you marked as documented and non-duplicated. Owner-proposed SDE also includes add-backs that are more likely to be challenged. The second is not a higher-confidence number; it is your proposed figure, and a buyer or adviser may reduce it in due diligence. The tool separates commonly used adjustments from those more likely to be challenged so you can see both.

How do you handle more than one working owner?

Only one owner's compensation is added back. For each additional working owner, the tool nets their expensed pay against the total employment cost of replacing them, which can increase or decrease SDE. If you leave a replacement cost blank, that owner's pay is not adjusted and the estimate is flagged as incomplete.

Do you store what I type?

No. The arithmetic runs entirely in your browser; no figure is sent, saved, or put into analytics or the page address.

Keep your SDE, then learn what it is worth
Note your Core SDE figure. It is the starting point for a valuation. What is my business worth and SDE explained show how SDE turns into a price.

Moonmoot gives business guidance based on the data it can see. It is not financial, legal, tax, or investment advice.