请问

问题如下：

Which of the following statements best describes the meaning of “normalizing earnings” in the context of private business valuation?

选项：

Adjustments to revenues and/or costs necessary to allow comparison of private company financial results to comparable public companies

Adjustments to offset the cyclicality of revenues and/or costs for private companies

Adjustments that allow comparisons due to the lack of marketability for private companies

解释：

A is correct. Private companies, especially when a controlling owner also serves as a senior manager, may engage in economic transactions such as non-market-based market compensation that distorts earnings versus comparable public companies. Cyclicality is a factor that may need to be adjusted in public companies as well, while lack of marketability should not affect earnings.