PARTIAL YEAR EXPENSES WHEN CALCULATING SDE
Hello. The company my partner and I are looking at hired an employee in September of last year. In the income statement for 2019, her salary is rightfully only 25% of the go-forward cost of having her on staff in[redacted]Assuming that we want to keep the employee in her current position and at her current pay, how should we think about the valuation of the company?
For example, let's assume her salary is $50,000 per year. Should we decrease the previous year's SDE by $37,500 to account for the fact that our realized SDE will actually be lower by that amount (assuming no other growth) in 2020? Does the same logic apply to other expenses that started mid-year and will be continuing expenses moving forward?