Case study help: exit ROI, IRR, and return analysis
Hi good people of WSO. I bombed my case study for a PE junior analyst position, but still wanted to review what I was struggling with - would appreciate if you could offer some guidance/advice on the below two questions I couldn't answer.For your background, I was given three financial statements for a theoretical company and told to model an upside/downside scenario - this part I completed. Then, I was told to do some analysis on return and exit values - these parts I got trapped, especially (assume current year is 2020):On the assumption the company is valued at 15x EV/EBITDA upon exit in 10 years WITH 15% dilution AND 50% stake was acquired for $100mn in 2020, what is exit ROI and IRR for the investment? (I tried to first get EBITDA by multiplying EV/EBITDA by EBITDA given in the model, but got stuck in the latter parts with dilution and stake value in play, how would you solve this?)Show the changes in returns if gross margin goes down by 4%(How would you calculate the impact on return? and impact on three financial statements?)Would highly appreciate your help, thank you!!!
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