Hi, may I know how can I forecast EBITDA when there is not enough information for you to do a DCF. I have got sales growth 2017 and earnings 2017. How can I derive EBITDA 2017, would it be sensible if I use the sales growth for a tech company? Thanks.
Well if you have earnings for 2017 you just need to add back taxes and projected D&A (% of rev) to get to EBITDA. Was that your question or am I missing something?
Well that depends what your COGS growth and SGA growth is as well. You usually can predict EBITDA as a % revenue (ebitda margin). So if you have 2016 EBITDA and 2016 sales you can calculate a margin and use that in 2017.
Is this for a class or interview question? You would need more info.
It is for a case study for assessment centre, I didnt get much information from the info pack so would have to make a lot assumptions. I dont have sales revenue for 2017 though. I only have the sales growth for 2017, and revenue for 2015A, can I just multiply them to get the revenue?
so take Rev 2015A * (1+g) i'm guessing if thats all they give you. If you don't have actual rev #'s for 2016 and 2017, that seems to be the logical answer. Just assume that it has been that growth for the past few years.
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Well if you have earnings for 2017 you just need to add back taxes and projected D&A (% of rev) to get to EBITDA. Was that your question or am I missing something?
Hi thanks for your reply, I dont have D&A. Would you say its sensible to use sales growth as EBITDA growth and predict EBITDA2017?
Well that depends what your COGS growth and SGA growth is as well. You usually can predict EBITDA as a % revenue (ebitda margin). So if you have 2016 EBITDA and 2016 sales you can calculate a margin and use that in 2017.
Is this for a class or interview question? You would need more info.
Make sense?
It is for a case study for assessment centre, I didnt get much information from the info pack so would have to make a lot assumptions. I dont have sales revenue for 2017 though. I only have the sales growth for 2017, and revenue for 2015A, can I just multiply them to get the revenue?
so take Rev 2015A * (1+g) i'm guessing if thats all they give you. If you don't have actual rev #'s for 2016 and 2017, that seems to be the logical answer. Just assume that it has been that growth for the past few years.
2015A*(1+G)^2 to get 2017?
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