{
  "title": "What is adjusted EBITDA? Definition, formula and example",
  "url": "https://acquisitions.com/blog/what-is-adjusted-ebitda/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-22",
  "updated": "2026-10-22",
  "section": "Glossary",
  "keyword": "Adjusted EBITDA",
  "short_answer": "Adjusted EBITDA is EBITDA after two kinds of corrections. Add-backs remove costs a new owner will not carry, such as one-time, non-recurring or owner-related expenses. Normalisations bring costs that are off-market, like a low owner salary or cheap rent from a relative, up to what a buyer would really pay. It is the figure most deal prices are built on.",
  "facts": {
    "Reported EBITDA": [
      "$900,000",
      "Starting point"
    ],
    "Add back: one-time legal settlement": [
      "+$60,000",
      "Non-recurring, invoice on file"
    ],
    "Add back: owner's personal travel": [
      "+$25,000",
      "Card statements on file"
    ],
    "Normalise: owner's salary $50,000 → market $150,000": [
      "−$100,000",
      "A CEO must be paid"
    ],
    "Normalise: rent $60,000 → market $120,000": [
      "−$60,000",
      "Related-party lease"
    ],
    "Adjusted EBITDA": [
      "$825,000",
      "Lower than reported"
    ]
  },
  "sources": [
    "https://www.investopedia.com/terms/e/ebitda.asp",
    "https://www.investor.gov/introduction-investing/investing-basics/glossary/non-gaap-financial-measures",
    "https://www.sba.gov/funding-programs/loans/7a-loans"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}