Read the statement. Change the deal.

Use listing numbers, not optimism. Add the people and tools you will really need, move the financing, and see what cash remains after debt.

1. Normalize the business

New here? Pick an industry example first to see the calculator work, then swap in the seller's real numbers.

Start with a teaching preset, then replace every number with the seller's evidence.

Industry exampleIllustrative structure, not a market average.

Choose a sector to prefill a plausible team and operating structure.

OPERATING STATEMENTANNUAL AMOUNT

REVENUE

Annual revenueAll sales before expenses.

OPERATING COSTS

Reported operating costsPayroll, rent, materials, insurance, software and marketing.

Materials / cost of sales Payroll and contractors Rent and utilities Marketing and sales Insurance and licenses Software and office Vehicles, repairs and other

OWNER ADJUSTMENTS

Current owner salary + benefitsAdd back only if already included in costs.

Verified one-time add-backsPersonal or non-recurring costs supported by evidence.

Revenue$0

Reported operating costs($0)

Reported operating income$0

Add back: owner salary + benefits$0

Add back: verified one-time items$0

Normalized SDE$0

2. Price the business (seller's view)

A broker's math starts from the seller's normalized SDE times a multiple. Your own costs come next, and they change what you can afford - not what the seller thinks it is worth.

SDE multipleYour shared calculator uses normalized SDE × this multiple.

IMPLIED VALUATION -

BUYER CEILING AT THIS MULTIPLE -

Buyer ceiling = (seller SDE minus your planned costs below) × the multiple. What the same multiple supports once the people and tools you will need are funded. A negotiating reference, not a valuation.

Purchase price used for financingDefaults to the implied valuation. Enter a different number to test an offer.

3. YOUR OPERATING PLAN (BUYER'S VIEW)

Add the people, software, maintenance and other costs you expect after closing. They are deducted from the earnings available to you below.

Buyer cash %20% is a prudent planning assumption. Some programs and lenders may permit less.

Seller note %15% keeps part of the seller's proceeds tied to the transition, but it is negotiated, not required.

Senior-loan interest %A planning input, not a quote. Acquisition debt is commonly priced from a lender's base rate plus a risk spread.

Canadian acquisition loans-from BDC, banks or other eligible lenders-are commonly priced from a lender's base rate plus a risk spread. Use this as a planning range, not a quote.

Senior-loan term (years)Seven to ten years is a useful scenario range for many cash-flow acquisition loans; actual terms vary.

Seller-note annual paymentThe dollars paid to the seller each year. This is separate from the original seller-note balance above.

SELLER NORMALIZED SDE -

PURCHASE PRICE USED FOR FINANCING -

CASH NEEDED UPFRONT -

SELLER-NOTE PRINCIPAL -

SENIOR-LOAN PRINCIPAL -

What remains each year?

Seller normalized SDE -

Annual senior-loan payment (principal + interest) -

Annual seller-note payment -

Pre-tax cash remaining -

Senior-debt coverage (buyer-adjusted SDE ÷ senior payment) -

Total fixed-debt coverage (incl. seller note) -

Funding stack: buyer cash + seller-note principal + senior-loan principal = purchase price used for financing. Interest is not included in the principal figures; it is included in the annual senior-loan payment. Cash needed upfront excludes legal fees, lender fees, working capital, inventory adjustments and reserves.

Before you trust the answer

The books and the supplied statements point to the same discipline: normalize first, then verify.

Reconcile revenue to tax returns, bank deposits and invoices.
Replace the seller’s labour with a realistic owner or operator salary.
Separate genuine one-time add-backs from recurring costs.
Budget maintenance capital expenditure, inventory and working capital.
Stress-test customer concentration, owner dependence and key-person risk.
Confirm debt coverage still works after tax, reinvestment and personal runway.

Pressure-test it before an LOI

Bring this exact structure to a free call. We'll challenge the owner-role, financing and downside assumptions before you treat the result as available cash.

Book a free call →

Planning tool only - not a valuation, lender commitment or investment recommendation. Missing items may include tax, transaction costs, working capital, capital expenditure, inventory and personal runway.