Not sure how to go about solving this! Anyone have any ideas?
Given FY2018 revenue of $100, profit margin of 40%, EBITDA margin of 20%. Given a FY2019 top-line growth rate of 25%, told that your Operating Expenses are 60% fixed and 40% variable. Find profit margin and EBITDA in $'s for FY2019.
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37 ebitda 57 profit in FY 2019z only makes sense if you have a fuckton of interest income, but those are the numbers, someone correct me if i’m wrong
You're saying gross profit margin of 40% or net income margin of 40%?
I believe it was Gross Profit margin thinking back on it. Thank you!
Assumptions: 1) 25% topline growth all volume driven, (2) GP margin of 40% is fixed
FY2018
Rev: 100
GP: .4*100 = 40
EBITDA: 20
Solve for OpEx = 40-20 = 20
Fixed Operating expense: .6*20 = 12
Variable Operating Expense: .4*20 = 8
FY2019
Rev: 100*1.25 = 125
GP: .4*125 = 50
Fixed Operating expense: 12 --> remains 12 because it's fixed
Variable Operating Expense: 8*(1+.25) = 10 --> I am assuming that the top line growth was NOT price driven but all volume (check with the interviewer)
Total OpEx: 22
EBITDA = 50-22 = 28
Alternative and quicker method. Operating cost = 20 and variable of is 8. COGS = 60. Assuming cogs are variable, (100-68) /100 = 0.32. Ebitda margin = 0.2 and 0.32/0.2= 1.6. So DOL is 1.6. Revenue grows 0.25 and EBITDA grows 0.4. Ebitda = 20*1.4= 28.
What’s the 1.4 from?
Growing 40% so you multiply by 140% or 1.4
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