Why Use Seller’s Discretionary Earnings to Value a Business?
Business appraisers will often refer to and use multiples of Seller’s Discretionary Earnings, or SDE, when discussing or calculating firm value.
At Pinnacle Valuations only one valuator, or certified valuation specialist, works on an assignment from start to finish. This lends a consistency of thought and logic throughout the investigation, research, and analysis steps. This is very important: when it is time to make the critical judgment calls about cash flows and risk factors, i.e., the decisions that determine value, the valuator is not relying on assumptions or analysis that is not their own. This continuity of logic and perspective ultimately results in a very cohesive and reliable valuation report. When you need a professional, don’t hesitate to contact us.
Business appraisers will often refer to and use multiples of Seller’s Discretionary Earnings, or SDE, when discussing or calculating firm value.
There are many different factors to consider when a business needs to apply for an SBA loan; the Small Business Administration lays out all of
Seller’s Discretionary Earnings is a measure of the total financial benefit available to a single owner working in the firm on a full-time basis.
Dennis is Pinnacle Valuations’ founder and Director of Valuations. He is a Certified Business Appraiser through the Institute of Business Appraisers and specializes in the valuation of small, privately-held businesses. He has valued companies in a broad range of industries across the United States and for a variety of reasons, including Small Business Administration (SBA) loans, startups seeking an independent opinion of value to provide to potential investors and for buyouts of initial investors, C to S corp conversions, general business planning, and more.
Prior to becoming a business appraiser, Dennis worked as a correspondent for Bloomberg News in Latin America, reporting on financial and economic news events and providing analysis and insight into financial markets.
He interacted with high-ranking business leaders and politicians daily. In addition to working as a news correspondent, he also worked for Citigroup in New York City; he formed part of the international operations team and focused on business intelligence and the competitive market space in Latin America. This role included data collection, analysis, synthesis, presentation and recommendations to Citi’s top executives. In addition to his Certified Business Appraiser credential, Dennis holds a Master in Business Administration (MBA) degree from the Thunderbird School of Global Management.
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