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Acquisitions as a recurring item in adjusted EBIT
The company I am valuing has stated that intends to grow and has done in the past by regular acquisitions. It has acquired companies every year in the past 5 years. Should acquisitions be accounted for as a recurring item and NOT added to EBIT? I've seen a model where "Acquired in-process research...
Why are non-operating assets not a part of EV if non-operating income is a part of EBIT?
Hey guys, if I am not mistaken, the difference between operating income and EBIT is that EBIT also contains non-operating income (at least Investopedia explains it this way). Now, if we use EBIT/EBITDA for multiples and EBIT to derive FCFF, shouldn't non-operating assets (which generate the...
EBITDA Question Bubble Gum Co
Bubble Gum Co.’s operating profit is 5,000. It has a litigation charge of 1,000 in SG&A. D&A is 500. What is EBITDA ? I thought the answer would be $4,500. EBIT or operating income = Revenue -Expenses so $5000-$1000 of litigation expense. and then add D+A which would be $4000+$500=$4,500 turns out...
EBIT Question!
Hi guys, To calculate FCF for cash flow projections, the formula states FCF = EBIT(1-T)....... (and so on). My question is - is it possible to use EBIT(1-T) and (EBIT - Taxes) interchangeably? For (EBIT - Taxes), the amount of taxes can simply be obtained from the income statement/cash flow...
Urgent: EBIT
Guys, When I show EBIT for a company, should it be before goodwill and impairments or after?
Deal size in Cover Letter
Hey, I know it is easy to fluff up anything in a resume or cover letter. ie shredding paper as an intern: "regularly maintaining corporate security process" (you all know what im talking about) anyway, Im interning in M&A now and want to know if reporting deal size's I worked on is what recruiters...
FCF, LFCF correct formula?
I've noticed that there some conflicting formulas for FCF (unlevered), which one is correct? Start with NI: FCF = NI + D&A - change NWC - CapEx Start with EBIT: FCF = EBIT - taxes + D&A - change NWC - CapEx These seem to be conflicting because interest is subtracted to get NI, while interest remains...
Negative Operating Income and FCF's
I'm building a DCF model. How do I calculate tax expense when Operating Income (EBIT) is negative to get to FCFs? Net Operating Loss Carry Forward [quote "dosk17 - Retired Investment Banker"]Basically here is what you do: As the posters said above, if you have negative operating income then you...
EBIT multiple or EBITDA multiple
What determines whether an industry uses the EBIT multiple versus the EBITDA multiple? I've heard that for capex heavy industries, EBIT is used more often since the depreciation in part covers the capital expenditures. However, woudldn't it be better to use an EBITDA - Capex multiple in this case?...
EBIT V. EBITDA
I was bored and reading through my old vault and interview guides from a couple of years ago, and noticed that one of the questions that we ask in interviews (albeit an unfair one - i didn't know the answer till I started banking) is the differences between EBIT and EBITDA , and why EBITDA is not...
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