Request from a talented associate
Question, how do you react when you get a ridiculous request (that is wrong) from an Associate? What is the best way to go about it?
My associate told me to amend a model to reflect the following:
Adjusted EBITDA
Add: Adjustments
EBITDA
Less: D&A
EBIT
My first question was how can the EBITDA be adjusted before you apply adjustments to it?
It is clearly wrong as Adjusted EBITDA is obtained only after you apply adjustments to normal EBITDA, which is the status quo.
@batman1000" You remove the adjustments out of the corresponding lines above in revenue/cogs/operating expenses (wherever they need to come out of). This way, you are showing these P&L line items on an adjusted basis so they are more meaningful.
So, your associate isn't wrong. Plenty of people show it this way (you just need to know where the adjustments fall in the P&L). Does this make sense? Hard to explain over a message board. But for example, say you had gross profit of 10, opex of 5, d&a of 2 and adjustments of +1 (which is an adjustment from opex). Would look like:
Gross profit: 10 Opex: 4 (to adjust for the +1 of adjustments) Ask ebitda: 6 Less adjustments: 1 Unadjusted ebitda: 5 Less d&a: 2 Unadjusted EBIT: 3
Also, don't listen to @LExtraordinaire" - he is wrong
Also, don't assume your associate is wrong just because you don't understand something. Not saying he is correct 100% of the time, but don't discount his experience.
Are you too scared to ask your co-worker something in person when you don't understand???
I agree with SnappleApple Why are you asking us? Ask your associate. Thats how you handle it lol. If he says its done that way, do it that way.
If your VP says its wrong, its on your associate, not you (even though he might blame you).
Guys, can you share how you make your adjustments in terms of formatting? Are you putting the number for the adjustments to the right of the set of financials or on the bottom? Color coding it?
Just looking for some best practices, hopefully my question makes sense.
dude you're in banking. you're there to process shit, not to think. i didn't even fully read your sentence, but just do what your associate says. everything in banking is about covering your own ass.
this sounds quite harsh but it is reality.
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