$240 Revenue, $96 COGS, $100 Operating Profit, $40 D&A, $20 Interest Expense, $54 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 = ($240 - $96) / $240 = 60%.

EBITDA = EBIT + D&A = $100 + $40 = $140.

$240 Revenue, $96 COGS, $100 Operating Profit, $40 D&A, $20 Interest Expense, $54 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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