---
title: "What Is Adjusted EBITDA? Dental Practice Glossary"
description: "Adjusted EBITDA is EBITDA after one-time, unusual or owner-specific items are added back or removed, to show the earning power a buyer could expect from the..."
url: https://joncopeland.multisites.ai/glossary/adjusted-ebitda
publisher: Copeland Consulting Services
email: drcopeland@joncopelanddds.com
contact: https://joncopeland.multisites.ai/contact
---

Finance and valuation

# Adjusted EBITDA

Adjusted EBITDA is EBITDA after one-time, unusual or owner-specific items are added back or removed, to show the earning power a buyer could expect from the practice.

Adjusted EBITDA starts with [EBITDA](https://joncopeland.multisites.ai/glossary/ebitda) and changes it for items that would not continue under a new owner. Examples include a one-time expense or an owner's pay that is above or below market. There is no single rule for what is adjusted, so each add-back should be documented and explained. The IRS Internal Revenue Manual says historical financial statements should be analyzed and, if necessary, adjusted to reflect the appropriate income or cash flows for the valuation method used. The same idea applies here. Buyers and lenders may challenge add-backs they cannot support. A CPA or appraiser should review them. Adjusted figures feed the [valuation multiple](https://joncopeland.multisites.ai/glossary/valuation-multiple).

[Next stepPractice consulting with Dr. Copeland](https://joncopeland.multisites.ai/contact?topic=consulting)

## Related terms

-   [EBITDA](https://joncopeland.multisites.ai/glossary/ebitda)
-   [Valuation multiple](https://joncopeland.multisites.ai/glossary/valuation-multiple)
-   [Owner compensation](https://joncopeland.multisites.ai/glossary/owner-compensation)
-   [Practice appraisal](https://joncopeland.multisites.ai/glossary/practice-appraisal)

## Sources

1.  [IRS, Internal Revenue Manual 4.48.4 Business Valuation Guidelines](https://www.irs.gov/irm/part4/irm_04-048-004)

## Talk with Dr. Copeland

[Contact Dr. Copeland](https://joncopeland.multisites.ai/contact)[Email](mailto:drcopeland@joncopelanddds.com)