$200 Revenue, $60 COGS, $80 Operating Profit, $20 D&A, $10 Interest Expense, $50 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 - $60) / $200 = 70%.

EBITDA = EBIT + D&A = $80 + $20 = $100.

$200 Revenue, $60 COGS, $80 Operating Profit, $20 D&A, $10 Interest Expense, $50 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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