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Normalized Financial Glossary

What is it? Definition To place on a comparable basis. In a typical valuation, historical results are adjusted to remove interest expense, goodwill amortization, and any taxes paid. Both historical and future financial results are also adjusted to remove any excess business owners compensation. Typically, any discretionary expenses that would not be paid to a non-business owner, professional manager are also removed. Normalizing financial results allows for a better comparison of company results over time.

Finance Term Definition Added By: Jasmine

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