# EBITDA

Profit before interest, taxes, depreciation, and [amortization](https://searchspheresource.com/glossary/amortization).

Larger deals price on EBITDA multiples rather than [SDE](https://searchspheresource.com/glossary/sde), and the two never compare because EBITDA already subtracts a market manager's pay. So the first question on any listing is which measure the multiple is built on, since an EBITDA multiple applied to SDE prices a full salary as if it were profit.

In numbers: A business showing $510k of SDE would show about $360k of EBITDA after paying a $150k manager to replace the owner, which is why an SDE multiple and an EBITDA multiple are never comparable.

Source: https://searchspheresource.com/glossary/ebitda
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