Hi all,
I'm interning at a PE firm, and we are about to close on a deal. My boss just finished a covenant compliance model for the bank, and we were just told by someone who checked it that our EBITDA rollup numbers were off by several hundred k, the interest expense is too high and bank debt is too low. My boss is out of town for 1 week, so I'm helping him out around the office. He has asked me to figure this out. I've been racking my brain trying to fix it. I haven't had any modelling experience before so I ask you: what is the best way to tackle this? Thank you very much for you help.
Not a lot of information to work with in your question. Maybe take a look at the credit agreements and the definitions of EBITDA etc. It may be that there are some items included in the calculations for the purposes of covenant compliance that you wouldn't normally include for budgeting or valuation etc. Who told you the numbers were wrong?
It was our CFO. Unfortunately, I don't have a lot to go by. One of the other VP's was able to help with the debt & EBITDA. I was curious if there was a standard approach to similar situations.
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