Glossary
Add-backs
Add-backs are expenses added back to a business's profit to show what a new owner would earn. Common ones are the owner's salary and benefits, interest, depreciation, and genuine one-time costs.
Each dollar of add-backs raises the price by the valuation multiple. At 3×, a $10,000 add-back adds $30,000 to the price.
The trap: recurring costs presented as one-time, family members on payroll who do real work, unreported cash, and savings the buyer would have to create. No document, no add-back.