Qualifying EBITDA Add-Backs - Separating Fact From Fiction | Masterclass

If you’re prepping for a sale, buying a company, or just EBITDA-curious, this session breaks down EBITDA add-backs (aka adjustments): what qualifies, what gets rejected, and how buyers, PE firms, and QoE providers treat them in diligence. We define EBITDA vs Adjusted EBITDA, show how owner discretionary expenses, one-time or non-recurring costs, rent normalization, and above-market owner compensation roll up into a defensible Adjusted EBITDA, and how that can move enterprise value dollar-for-dollar at deal multiples. We cover Quality of Earnings (QoE), working capital, LOI structures tied to post-QoE EBITDA, financial vs strategic buyer perspectives, and the line between add-backs and synergies. Real-world examples show what the market will and will not accept, how to document and track adjustments monthly, and why clean, conservative, well-evidenced add-backs protect valuation and deal certainty.