Glossary · Reading the business
In short
These financial reports show a business's revenue, costs, and profit or loss over a specific period. They are critical for understanding historical performance and profitability.
You'll review income statements for at least the past three years during due diligence to verify revenue trends and identify major expenses. Pay close attention to owner's salary and discretionary expenses, as these are often 'add-backs' when calculating normalized cash flow.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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