Start from the profit in your accounts and adjust it the way a buyer would. Each line comes with a plain-English note on what it is and why it's there.
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Adjusted profit calculator
Sometimes called adjusted EBITDA
Your adjusted profit
£0
Put in your profit before tax to start. Each line below explains what a buyer does and why.
- Profit before tax
- £0
- Add back interest
- £0
- Add back depreciation and amortisation
- £0
- EBITDA
- £0
- Add back one-off costs
- £0
- Add back your personal costs
- £0
- Take off one-off income
- £0
- Add back what you're paid now
- £0
- Take off the cost of someone to do your job
- £0
- Adjusted profit
- £0
The profit in your accounts before Corporation Tax. This is where a buyer starts.
Interest depends on how you've financed the business. A buyer will finance it their own way.
An accounting charge that spreads the cost of equipment and past purchases over several years. No cash leaves the business for it in the year.
Earnings before interest, tax, depreciation and amortisation. In plain words, the profit from trading, which lets buyers compare businesses however they're financed.
They won't come round again under a new owner. A buyer will want evidence for each one.
They're really yours, so they stop when you step back.
A buyer can't count on it happening again.
Your salary, the employer's National Insurance on it (£0) and your pension. It stops when you step back.
A salary of £0, employer's National Insurance of £0 and a pension of £0. This is often the biggest adjustment.
The profit a buyer would use to value the business. You'll sometimes hear it called adjusted EBITDA or maintainable profit.
A rough guide
A buyer's accountant will check every adjustment against your accounts and ask for evidence. National Insurance uses the employer rates for 2026 to 2027. This isn't accounting or tax advice, so talk to your accountant before you share figures with a buyer.
Why buyers adjust the profit
Accounts for an owner-run business are usually prepared for the tax return, not to show a buyer what they'd earn. So before a buyer values a business, their accountant adjusts the profit. They add back costs that won't carry on under a new owner, and take off costs that will, above all the cost of paying someone to do the owner's job.
Many owners pay themselves a modest salary and take the rest as dividends. Dividends aren't a business cost, so they don't reduce the profit in the accounts, but a new owner will still need someone in your seat. That's why the adjusted profit is often lower than owners expect. It can work the other way too, if you pay yourself more than the role would cost.
Most buyers then multiply the adjusted profit by a figure that reflects risk and growth. Our guide on how to value a business explains how.
What it leaves out
- Rent. If you own the premises and the business pays you less than a market rent, or none, a buyer will take off a market rent.
- Spending on equipment. If vans or machines will need replacing soon, a buyer will count the cost, even though EBITDA leaves it out.
- A normal year. Buyers usually look at the last three years of accounts and the current year's figures. One good year on its own won't carry much weight.
- Staff a new owner wouldn't need. A buyer may add back their cost too. Put family who don't work in the business under your personal costs.
- National Insurance details. It uses the standard employer rate of 15% on pay above £5,000 a year for each person, and leaves out the Employment Allowance, which lowers the bill for some businesses.
Sources
- Headland Partners: How to value a business in the UK
- GOV.UK: Rates and thresholds for employers 2026 to 2027
- GOV.UK: Workplace pensions, what you, your employer and the government pay
From profit to value
The adjusted profit is where most valuations of an owner-run business start. Add your sector and the things that move the price, such as how much the business relies on you, to get a rough range.
How to value a business in the UK
How buyers choose a multiple, and what pushes the price up or down.
