Case 2 of 5
Specialty auto-parts distributor, three years of financials
Difficulty
A specialty auto-parts distributor: TTM revenue $5.8M, seller-adjusted SDE $980K. The addback schedule includes $140K of 'owner health insurance,' $90K of 'one-time IT system migration' (this year only), and $210K of 'non-recurring bad debt write-off' — which appears in each of the last three fiscal years, always booked in Q4, always attributed to a different customer. You are three days from your QoE deadline.
1. Which addback should you push back on hardest? Is it recurring or one-time, and why does that pattern matter? What's your concrete next step to verify it before you rely on it?
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