After wanting to know how much Seller Finance (https://tinyurl.com/3Q25SellerFinance) is typical, and how frequently Net Working Capital (https://tinyurl.com/3Q25NetWorkingCapital) is included in the price, many sellers and buyers want to know which valuation metric is more prevalent for their size transaction. The table below shows the four-quarter average percentage of how often Seller’s Discretionary Earnings (SDE) is used versus EBITDA of 3Q25 based on the IBBA/M&A Source Market Pulse Report. There are general guidelines for which to use, and in a perfect world, the results from using one versus the other would be the same. To learn which may be more appropriate for your business, feel free to reach out.
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