A finance resource by Seth Sokoloff
Build the bridge.
Question every adjustment.
Turn reported EBITDA into a transparent adjustment schedule. Separate the amounts you accept from the claims that still need work—and keep the evidence next to the numbers.
The discipline behind the number
01 Reconcile the starting point
02 Test the evidence
03 Show both directions
Interactive workbench
EBITDA adjustment bridge
All amounts are USD. Start with the fictional example or enter your own scenario. Positive amounts increase EBITDA; negative amounts reduce it.
Enter a starting EBITDA measure already reconciled to your source accounts. Do not add interest, taxes or D&A a second time.
Keep the same period, currency and entity perimeter for every item.
“Accepted” means included by you in this scenario. It does not mean allowable under a credit agreement, verified by an adviser or appropriate for SEC reporting. Disputed and excluded items are omitted from the primary result.
There is no automatic storage or server submission of tool entries. Download a scenario JSON file to resume later with “Load scenario”; downloaded files stay under your control and may contain sensitive notes. CSV is for review, not re-import. Refreshing clears this tab’s work. Up to 50 adjustments; imported files must be 512 KB or smaller.
Your selected scenario
Reported EBITDA
$5,000,000Accepted net adjustments
+$30,000Adjusted EBITDA
$5,030,0005 adjustments · 3 accepted in scenario
Accepted net adjustments equal 0.6% of reported EBITDA.
The sensitivity can be higher or lower than the accepted scenario. Neither result is a cash-flow forecast, valuation opinion or calculation of covenant EBITDA.
Documentation check
Accepted adjustment documentation
Based on absolute amounts, so positive and negative items do not cancel each other out. Any non-empty note or reference counts as entered; this measures completeness, not evidence quality or eligibility.
Next review actions
Reviewer handoff
EBITDA decision summary
View the adjustment register included in print
| Description | Signed amount | Scenario / recurrence | Evidence notes |
|---|
No adjustment rows entered.
Review next: reconcile the starting EBITDA, inspect supporting documents, resolve disputed items and check overlap. “Accepted” is your scenario choice; this summary is not a diligence opinion, cash-flow forecast or covenant calculation.
- Review every adjustment against its source evidence and intended use.
A reviewable process
Make the schedule useful
to the next reviewer.
01 /
Anchor it to the accounts
Identify the exact period and entities. Keep a separate reconciliation from net income to your starting EBITDA, then trace each normalization back to the same underlying accounts.
02 /
Explain the counterfactual
What would the expense or income have been without this event? If an owner leaves, replacement compensation may still be needed. A missing cost can require a negative adjustment.
03 /
Keep disagreement visible
Separate booked corrections, normalization proposals and future benefits. Record the disputed amount instead of silently burying it inside the headline result.
Practical reading
Go beyond the add-back.
The EBITDA adjustment evidence checklist
What to request, how to challenge recurrence and how to prevent the same benefit appearing twice.
Read the checklist →Reported, adjusted and covenant EBITDA
A worked bridge showing why normalization, contract definitions and cash flow answer different questions.
Read the guide →Before you rely on the result
Common questions
Is every one-time expense an acceptable EBITDA add-back?
No. A label does not establish treatment. Review the nature of the item, the evidence, any replacement costs and the definition governing your use. In public-company reporting, the SEC warns that excluding normal recurring cash operating expenses can be misleading. See SEC guidance, question 100.01.
Why does the tool accept negative adjustments?
Normalization can reduce earnings. Removing an isolated gain or adding a cost missing from historical results can lower the result. The fictional example includes both positive and negative items so the bridge is not just a list of add-backs.
Does “accepted” mean the amount passes diligence?
No. It is a scenario setting you control. This calculator checks arithmetic and basic completeness; it cannot verify invoices, judge a contract definition or determine the sustainability of earnings.
Can I use this as a lender covenant calculation?
Use the definition and limitations in the executed agreement. This tool does not apply contractual caps, baskets, time limits or pro forma rules. For reporting structure and liquidity analysis, visit LenderReporting.com.