Every set of seller financials is a marketing document before it is an accounting document. The broker's pretty P&L and the owner's adjusted EBITDA exist to make the business look as profitable as legally possible. Your job is the opposite: to rebuild the real earnings from the tax return up, and to treat every add-back as a claim that has to be proven, not a number you accept. The gap between the seller's story and the provable cash flow is exactly where deals are won and lost.
The number you are handed is not the number you are buying
When a small business goes to market, the seller and broker assemble a package built to justify the highest possible price. At its center is an adjusted earnings figure, usually labeled SDE or adjusted EBITDA, that starts from reported profit and then adds back a long list of expenses the seller argues a new owner would not incur. Some of those add-backs are legitimate and obvious. Others are aggressive, padded, or simply invented. The headline number is the seller's best case, dressed as fact.