Seller's Discretionary Earnings ("SDE") is one method of measuring the total economic benefit a Buyer can expect to derive from a business. Generally, this is the sum of a business's net profits on its taxes, owner’s salary and benefits, any one-time business expenses, and any owner's expenses run through the company. SDE is the largest factor that influences the market value of the business.   SDE calculations should be handled by an experienced Agent. The math may seem simple at first glance, but there is a great deal of nuance knowing which expenses can be properly included in SDE. It takes an experienced broker to accurately recast the financial statements and calculate the correct SDE for a business.