How would you answer this?

Hey guys, I was in an interview the other day and had this question:

If a company trades at a 10x EV/Revenue but has a 20% EBITDA margin, what is the EV/EBITDA?

How would you go about answering it?

Thanks

5 Comments
 

Just pick a random number for revenue to see it. If rev is 100 then EV is 1000. If you have 20% margin then ebitda is 20. What’s the multiple then?

 

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