Normalised EBITDA is Adjusted EBITDA further refined to reflect the earnings the business would generate under normal operating conditions, including the cost of services currently provided gratis by the owner (such as a market-rate replacement for the founder’s role) and the cost of services that have been temporarily suppressed or one-off boosted. Normalisation is the process of converting historical financial information into a forward-looking earnings expectation.
Normalised EBITDA is the figure on which buyer valuations are typically based.