Net Income vs SDE

professional profile

September 14, 2022

by a professional from Bishop's University in Moncton, NB, Canada

This week, Tian wants to know about why SDE is so different from Net-Income. Is he being lied to?

Why is SDE used in the business sales world?

What if someone is cheating on their taxes?

How do they tell you without telling you?

Enter the world of the murky add-back and how you protect yourself.

Learn more here: https://youtu.be/7q_jBnaV7LY


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Reply by an intermediary
from University of Virginia in Metuchen, NJ 08840, USA
Another great one, David. This is a critical issue for small businesses without audited financials, which is more than 99% of the under $2 mm value business population. I also recommend to owners with high proportion of add-backs to be prepared for getting some of their proceeds in the form of earn-outs, consulting fees, etc. even if the buyer agrees to pay some cash for what is reported on tax returns.
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Reply by a professional
from University of Denver in Denver, CO, USA
Thanks, David. Always appreciate your posts. Full of great insights.
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