Valuation

Valuation terms: revenue, profit, EBITDA and SDE

Updated 2026-09-01

This guide is general information about how business sales are often discussed in Australia. It is not financial, legal, tax or investment advice, and it does not recommend any listing on Business Hosting.

Revenue is the income reported for a period before costs. It is not profit.

Gross profit is revenue minus the cost of goods sold, where the seller has supplied both. Gross margin is that figure expressed as a share of revenue.

Net profit is what remains after operating costs, as reported by the seller for that period. It is not cash in the owner’s pocket unless the seller says so.

EBITDA means earnings before interest, tax, depreciation and amortisation. Sellers use it to show operating earnings before those items. Business Hosting only displays EBITDA when the seller has entered it.

SDE, or seller’s discretionary earnings, is a figure some small-business sales use to show earnings before the owner’s wage and certain discretionary costs. It is only meaningful if the adjustments are explained.

A revenue multiple or profit multiple is a comparison of price to a reported figure. Multiples differ widely by industry, size, risk and deal structure. Business Hosting does not calculate a recommended multiple.