Seller Discretionary Earnings

Free Seller Discretionary Earnings calculator with clear step-by-step results.

About Seller Discretionary Earnings

SDE normalises a small business owner's total economic benefit for valuation.

Formula

SDE = net profit + owner salary + add-backs

Worked example

With the default values below, Seller Discretionary Earnings returns Seller Discretionary Earnings of $105,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net profitminimum 0 $: 60,000 $
Owner salary & benefitsminimum 0 $: 40,000 $
Interest & non-cash itemsminimum 0 $: 5,000 $

Results

Seller Discretionary Earnings: $105,000.00
Indicative Value (3× SDE): $315,000.00
Add-backs: $45,000.00

Step by step

1Values used
2Formula
3Seller Discretionary Earnings= $105,000
4Indicative Value (3× SDE)= $315,000
5Add-backs= $45,000

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How does this calculator work?