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What Is SDE in Business? Meaning, Formula, and Example

What Is SDE in Business? Meaning, Formula, and Example

SDE means seller’s discretionary earnings: net profit plus owner pay, perks, and legitimate add-backs. Here’s the formula, the example, and where broker SDE and lender SDE consistently diverge.

Avery Hastings, CPA
Avery Hastings, CPA
March 10, 2026
10 min read read
Seller’s Discretionary Earnings (SDE)
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