EBITDA Add-backs / Normalization

Adjustments to reported EBITDA that strip out non-recurring, personal, or non-business expenses to reveal the target's true recurring earning power.

Buyer Example

Target Ahmedabad chemicals manufacturer reports EBITDA of ₹8 Cr. Buyer's diligence team disallows ₹1.2 Cr of claimed add-backs (promoter's foreign travel, a one-time CSR spend), cutting normalized EBITDA to ₹6.8 Cr and reducing the offer valuation by ₹6 Cr at an assumed 5x multiple.