$200 Revenue, $50 COGS, $60 Operating Profit, $30 D&A, $10 Interest Expense, $36 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 = ($200 - $50) / $200 = 75%.

EBITDA = EBIT + D&A = $60 + $30 = $90.

$200 Revenue, $50 COGS, $60 Operating Profit, $30 D&A, $10 Interest Expense, $36 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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