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ValuationEarnings quality
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Topic guide

Quality of Earnings: What Sellers Should Prepare

Reported profit becomes useful in a sale only when a buyer can follow the bridge to normalized, transferable earnings. This desk covers that bridge: SDE, EBITDA, adjustments, revenue quality, and the records behind each judgment.

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An SDE schedule begins with the company records that preserve the source line, supporting document, and open question behind each proposed row.NextGen Seller original editorial image

NextGen Seller original editorial image
Start hereEarnings qualityGuideUpdated Aug 7, 2026

Seller's Discretionary Earnings (SDE): How to Calculate It

Calculate SDE from one entity and period by keeping the source line, adjustment records, offsets, and owner-role questions in view.

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In Quality of Earnings: What Sellers Should Prepare

More in Quality of Earnings: What Sellers Should Prepare

  1. 01Earnings qualityGuideHow to Review an EBITDA Add-Back Before a Business SaleAn add-back record should show the historical expense, any related recovery, and the work that may continue after the bill stops before a business sale.→
  2. 02Earnings qualityExplainerHow Quality of Revenue Connects Contracts to CashSee how one sales total connects to the customer agreement, delivery record, invoice or credit, cash application, and completed renewal history before a sale.→
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Related topics

ValuationEstimate a credible range by understanding earnings, methods, transaction perimeter, and transfer risk.→Sale readinessPrepare the company, sequence outreach, and protect confidential information before a process begins.→DiligenceOrganize the documents, explanations, and issue ownership that make buyer review manageable.→
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