Add-Backs
Adjustments that add certain expenses back to reported profit so earnings reflect a new owner’s likely benefit.
Last updated September 5, 2026
Add-backs commonly include the owner’s salary and benefits, personal auto or travel, one-time legal or repair costs, and other non-operating items. Legitimate add-backs are documented and would not continue under a typical new owner. Aggressive add-backs — ongoing staff, market-rate rent, or “one-time” costs that repeat — inflate SDE and the implied multiple. Buyers should ask for each add-back’s backup, not only a total.