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.
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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.
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