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# Everything you need to know about adjusted EBITDA
- URL: https://blog.sellingyourcanadianbusiness.com/everything-you-need-to-know-about-adjusted-ebitda/
- Published: 2023-12-10T13:52:04.000Z
- Updated: 2026-08-14T16:29:08.000Z
- Description: Our team is constantly working with and on behalf of buyers and sellers of privately owned Canadian businesses. We’re often presented with or trying to better understand adjusted EBITDA figures. It’s always a back-and-fo...
- Author: Karl E. Sigerist, Jr., ICD.D
- Tags: Articles Valuation, Articles Sell-Side

Our team is constantly working with and on behalf of buyers and sellers of privately owned Canadian businesses. We’re often presented with or trying to better understand adjusted EBITDA figures. It’s always a back-and-forth with a seller and buyer to agree on what really constitutes an acceptable adjustment.

Adjusted EBITDA (earnings before interest, taxes, amortization, and depreciation) is a financial metric used to measure a company's cash earnings. It is calculated by taking a company's EBITDA and making further adjustments for expenses or revenues that are not considered "core" or essential to the company's operations. These adjustments may include one-off events, personal expenses, above market compensation, benefits, perks and intercompany transactions.

When negotiating the sale of a business, buyers and sellers often disagree on what constitutes an acceptable adjustment to EBITDA. As a buyer, it is important to carefully evaluate whether any proposed adjustments are truly non-core or non-recurring to the business being purchased. As a seller, it is important to accurately identify and include the most relevant adjustments to improve the EBITDA. Operational decisions, such as whether to buy or lease equipment, can also impact the EBITDA.

If you have questions about EBITDA adjustments for your business, it is always a good idea to seek expert guidance. Our team has access to valuable resources to help you understand and navigate this metric.

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