Value creation calculations
How would one go about calculating the impact increases in EBITDA, deleveraging, multiple appreciation, etc. have on returns, particularly MOIC (e.g., $50mm increase in EBITDA increased MOIC by 1.0x)?
Feel like this should be relatively easy, but have had a long day and can’t for the life of me figure out the appropriate calculation. Is it essentially just figuring out the impact these factors had on equity value?
Yes but you have to normalize all the other ones when you calculate each one.
Meaning like if calcing effect of multiple expansion you have to do like
Entry Revenueaverage margin(difference in multiple)
Have to use entry figures and averages to normalize out the other factors when calcing the effect of each lever.
These bridges are always a disaster in practice.
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