$300 Revenue, $150 COGS, $70 Operating Profit, $10 D&A, $15 Interest Expense, $40 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 = ($300 - $150) / $300 = 50%.

EBITDA = EBIT + D&A = $70 + $10 = $80.

$300 Revenue, $150 COGS, $70 Operating Profit, $10 D&A, $15 Interest Expense, $40 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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$300 Revenue, $150 COGS, $70