EBITDA Quality

The assessment of whether a company’s reported EBITDA reflects genuinely recurring, sustainable operational economics or contains one-time items, accounting adjustments, or owner-specific costs that will not persist post-acquisition.

High-quality EBITDA derived from well-documented, stable operational processes with predictable cost structures commands premium acquisition multiples. Low-quality EBITDA derived from opaque processes, excessive key-person dependency, or non-recurring revenue commands discounts.