$160 Revenue, $40 COGS, $50 Operating Profit, $15 D&A, $10 Interest Expense, $28 Net Income. What is the gross margin? What is EBITDA? What would you diligence to judge it as an LBO candidate?

Question

IBPrep · Accepted Answer

Gross margin = (Revenue - COGS) / Revenue = ($160 - $40) / $160 = 75%.

EBITDA = EBIT + D&A = $50 + $15 = $65.

$160 Revenue, $40 COGS, $50 Operating Profit, $15 D&A, $10 Interest Expense, $28 Net Income. What is the gross margin? What is EBITDA? What would you diligence to judge it as an LBO candidate?

Answer

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