Answer to this type of question is always: it depends. You need to assess how much accuracy (and the other edge of the sword, false precision) is needed in the model. Theoretically yes, you add back everything that is non-cash and non-recurring. Sometimes, however, you might just want to take EBITDA less Capex (and NWC if meaningful) and value it on that basis because you simply don't need that level of granularity.

 

thanks for the response I appreciate it. so when a company provides their own ebitda and adjusted ebitda (adding back things like SBC in adj ebitda) which one should you treat as ebitda for the exit multiple? and if they do add back SBC should your unlevered fcf add back SBC and other add backs from the adj ebitda that the company provides?

 

You need to use your discretion for that. Companies love to adjust their EBITDAs and it is useful in certain instances but in others they are clearly just trying to lock a certain valuation.

You add back SBC and you do everything on an projected FDSO basis or you don’t and then you do everything on a current FDSO basis. No matter what, you need to capture the dilution caused by SBC.

 

Iusto ipsam expedita ut accusantium. Voluptas libero dolores rerum provident.

Deserunt animi reprehenderit non ipsum possimus voluptatem incidunt. Aut beatae molestiae vitae tempore accusantium asperiores recusandae. Voluptatem voluptatum est aut sed. Dolor delectus necessitatibus ipsum iure reprehenderit et tempore. Quibusdam cumque eius praesentium voluptatum ea. Recusandae voluptates laudantium necessitatibus eum.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”