What is sde

[deepak]

I came across the term SDE (Seller’s Discretionary Earnings) while reading about business valuation, but I’m not entirely sure what it means. How is SDE calculated, and why is it important when valuing a small business? Is it different from EBITDA, or are they basically the same thing? Would appreciate some clarification or examples from anyone who’s dealt with this before.

 

[peterkavinsky]

SDE stands for Software Development Engineer, a professional who designs, develops, tests, and maintains software applications or systems.

 

[Emly]

SDE stands for Software Development Engineer. It’s a professional who designs, develops, tests, and maintains software applications or systems. SDEs use programming languages, algorithms, and problem-solving skills to create efficient and reliable software solutions for users or businesses.

 

[Will David]

One of the important measures of valuation of small owner-operated businesses is Seller’s Discretionary Earnings (SDE) which determines the pre-tax profit of the business plus the owner compensation reimbursement and reimbursement of interest and depreciation, amortization, discretionary expenses and one-time expenses. It is better than EBITDA as EBITDA applies benefits and perks of owner and SDE is better to evaluate how much can be taken out of business by new owner, and SDE is also applied in conjunction with multiple of SDE to estimate business value.

 

[amara]

SDE means Software Development Engineer — a key role that blends coding, problem-solving, and innovation to build great software