Q: "What are appropriate “add-backs” to BCF?"
A: Interest, depreciation, amortization, and taxes should be added back to operating profit to determine BCF.
Buyers and sellers often differ on what additional expenses may be added back to BCF. Usually they are:
1) one-time-only expenses not normally seen in the ordinary course, and
2) owner-related charges which a new buyer would not expect to incur.
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