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SDE CALCULATOR FOR SAAS BUSINESSES
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Seller's Discretionary Earnings Worksheet
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Instructions: Enter values in BLUE cells. Formulas calculate automatically.
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STARTING POINTAmountNotes
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Net Income (Pre-Tax)-From P&L - use accrual basis
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OWNER'S COMPENSATION ADD-BACKS
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Owner's Salary-Total W-2 or distributions taken
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Owner's Bonuses-
Performance bonuses, profit distributions
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Owner's Health Insurance-Medical, dental, vision premiums
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Owner's Retirement Contributions-401(k), SEP-IRA, etc.
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Owner's Payroll Taxes (Employer Portion)-FICA, FUTA, etc.
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Owner's Life/Disability Insurance-Premiums paid by business
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Subtotal: Owner's Compensation-
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INTEREST, DEPRECIATION & AMORTIZATION
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Interest Expense-Loan interest, credit line interest
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Depreciation-Equipment, computers, furniture
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Amortization-
Software development capitalization, intangibles
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Subtotal: I/D/A-
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NON-RECURRING EXPENSES
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One-Time Legal Fees-
IP filings, contract disputes, entity formation
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One-Time Accounting/Audit Fees-Above normal - QoE, special audits
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Platform Migration Costs-One-time tech stack changes
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Rebranding/Website Redesign-Major one-time marketing overhaul
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Lawsuit Settlements-Non-recurring legal settlements
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Other Non-Recurring (specify)-
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Subtotal: Non-Recurring-
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DISCRETIONARY / PERSONAL EXPENSES
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Owner's Vehicle Expenses-
Car payment, insurance, gas, maintenance
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Personal Travel Coded as Business-
Non-essential conferences, personal trips
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Meals & Entertainment (Personal)-Above reasonable business level
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Family Member Salary Adjustment-Difference between paid vs. market rate
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Personal Subscriptions/Memberships-Gym, clubs, personal software
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Home Office Deduction (if applicable)-Portion of home expenses
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Other Discretionary (specify)-
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Subtotal: Discretionary-
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SELLER'S DISCRETIONARY EARNINGS (SDE)
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VALUATION CALCULATOR
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SDE Multiple (enter between 2.0 - 6.0)3.5xSee Reference tab for multiple guidance
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ESTIMATED BUSINESS VALUE-
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KEY METRICS (Optional - for reference)
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Trailing 12-Month Revenue (TTM)-
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Monthly Recurring Revenue (MRR)-
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Annual Recurring Revenue (ARR)-
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SDE as % of Revenue0.0%Healthy SaaS: 25-40%+
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Revenue Multiple (for comparison)0.0x
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