Alright, a question I get often.

What is the difference between EBITDA vs SDE?
We dive into a few high-level differences to watch out for when evaluating businesses.

EBITDA is typically used for larger businesses ($2-3M+ Profit).
SDE is typically used for smaller businesses.

BUT neither of those is cash flow.

A few podcast nuggies:
- SDE is not Cash Flow
- Loan payments don't show up on the P&L many times
- If you take a business with no debt, stack on 80%+ debt, you are fundamentally changing the entire business structure. You are ADDING risk here.

You can get into trouble if you only take their costs vs WHAT YOUR costs will be.

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