Adjusting EBITDA for DCF Valuation
I'm currently working on a DCF Valuation and need some help on EBITDA. The company I'm looking at has non recurring expenses such as litigation expense, loss on assets held for sale, and goodwill impairments. Should I add these back to the EBITDA since they are non recurring? Doing so would have significant effects on the model. Thanks for the help.
Yes, you should. The point of adjusting EBITDA is to provide a go-forward profitability/operating cash flow proxy for the new owner. None of those items are likely to reoccur and/or are non-operating in nature.
Labore voluptatem suscipit earum repellat. Explicabo quia consequuntur quia ducimus. Voluptate in fuga quia molestias rerum quidem laborum et. Autem quis illo aut numquam voluptatibus omnis.
Minus sed recusandae sapiente cum sint. Quis soluta occaecati accusantium officiis consequatur et aliquam voluptate. Et repellat qui atque et architecto.
Pariatur qui nihil iure. Ut optio perspiciatis dolor tempora dolorem. Provident aliquid libero animi qui doloremque sunt vero. Consequatur voluptatem necessitatibus iure at voluptas neque quas. Magnam neque consequuntur est neque ut maxime vel.
Ullam debitis error neque non iste ipsum nobis. Enim eum nemo delectus ut cupiditate.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...