An EBITDA bridge is the line-by-line schedule that walks a target's earnings from the figure printed in its financial statements to the adjusted EBITDA a buyer actually prices — showing every add-back, deduction and one-time item as its own step rather than a single blended number.
A bridge exists because the market-based approach to valuing a Canadian private company runs off a multiple, and the Business Development Bank of Canada describes that approach plainly: it calculates value "by applying a valuation multiple, which may be based on EBITDA (earnings before interest, taxes, depreciation and amortization), revenue or other metrics," with the actual figure and ratio type varying "depending on many factors, such as industry and size of the company, market conditions and multiples used to buy or sell comparable businesses." The multiple is only ever as reliable as the earnings figure it is applied to — which is the entire reason a bridge is built rather than a single adjusted number handed over.
Deavo's own explainer on the two common Canadian small-business earnings measures notes that EBITDA, unlike seller's discretionary earnings, "does not add back owner compensation in the same way, on the assumption that the business already pays … a market wage to whoever runs it." That single sentence is why a bridge cannot skip the owner-compensation line: whether an owner's pay is already at market, above it, or below it changes the size — and sometimes the direction — of that adjustment.
Where a Chartered Business Valuator is engaged to opine on the resulting number, the report is governed by CBV Institute's Practice Standards 100, 110, 120 and 130, which "apply to independent valuation engagements beginning on or after January 1, 2026" and "set the minimum requirements for a valuator to establish a credible and properly supported conclusion of value." A bridge built for a formal opinion sits inside that disclosure framework, not just inside a buyer's spreadsheet.
A target reports $1,800,000 of EBITDA. Diligence finds three items to bridge: $220,000 to bring the owner's salary up to a market rate for the role (the owner was paying themself well below market), $85,000 added back for a one-time legal settlement that will not recur, and $40,000 deducted because rent paid to a related numbered company is currently below the market rate the space would command from an arm's-length landlord. The bridge runs $1,800,000 → +$220,000 → +$85,000 → -$40,000 → $2,065,000 of adjusted EBITDA, and it is the $2,065,000 figure, not the reported $1,800,000, that a purchase multiple is applied to.
See also: Adjusted EBITDA · Normalisation adjustment · Comparable company analysis.
A 30-minute call is enough to tell you whether AI pays for itself here.
Nobody publishes Canadian transaction data, so every valuation in this country quotes an American benchmark. We are building the Canadian one — multiples, asking-to-sale spreads and days on market, by sector and by city. Leave an email and you will see it first.
No pitch, no listings. One email when the first report lands.
