Recasting Financials
Restating your financial statements to show what the business really earns — the work behind every credible add-back.
Recasting financials is the process of restating your historical income statements to reflect the business's true earning power, separated from the personal financial decisions of the owner. It's the formal version of what add-backs document informally. A recast P&L shows reported revenue and expenses as your tax return shows them, but with adjustments: owner compensation normalized to market rates (or added back entirely for SDE), personal expenses removed, one-time items isolated, and any other distortions cleaned up so a buyer can see what the business actually earns. The output is sometimes called "recast EBITDA," "recast SDE," or "normalized earnings" — different names for the same idea. Recasting is what turns three years of messy small-business tax returns into a clean three-year history a buyer can underwrite.
Recasting is the work that turns three years of tax-optimized financials into deal-ready financials — and most small-business owners have never seen their own numbers recast.
Buyers know the tax return doesn't tell the whole story — what they're testing is whether the recasting holds up to scrutiny.
Find out what a buyer would see in your business — before you talk to one.
The Exit Desk free assessment takes 2 minutes. If you'd rather see what a full report looks like first, read a sample.
