Here are a couple of fun ones I might ask Analysts this year. Take your shot:
1) Co. has EV/EBITDA of 10x, P/E of 20x, int. exp. of $20M, int. rate of 5.00%, D&A of $20M, Cash of $50M, and mkt cap of $200M, what's company’s tax rate?
2) Co. has eq. val. of $500M, EV/EBITDA 10x, SG&A (no D&A)/Sales10%, D&A/Sales 5%, GM 35%, int. rate 5%, debt $100M, cash $20M, tax 20%. What’s the company’s net inc. mgn?
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hardo
1. P/E of 20x so net income is $10m, EV = 200 + (20/.05) - 50 = $550M
EBITDA = $55m - 20(int) - 20(D&A) = EBT = $15m
Tax rate = 5/15 = 33.33%
2. EV = 500 + (100-20) = $580m so EBITDA = $58m
EBITDA Margin = 35 - 10 = 25%, so sales = $232m
EBT = 58 - .05*232(D&A) - 5(int exp) = 41.4
NI = 41.4*(1-.2) = $33.12m
NI % sales = 33.12/232 = 14.28%
(not sure about the second one, but I think the first is correct)
I got the same as you
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