LBO Valuation - Normalizing EBITDAThe ultimate valuation of a prospective LBO is usually based on normalized EBITDA so it's important tounderstand potential adjustments to derive normalized EBITDA.Which of the following is not typically considered an adjustment when normalizing EBITDA?Gains/losses on sale of assetsAO Personal expenses being expensed to the companyReducing cost of goods sold as the private equity firm will drive costs lowerTransaction or professional feesScroll down for moreNext

The cost of goods sold (COGS), alternatively termed as cost of sales, encompasses the direct costs…

Answered: LBU Valuation - Normalizing EBITDA The…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Current Attempt in Progress Equity investments that are accounted for under the cost model will result in O recognition of dividend income only when actually received. expensing transaction costs when incurred. O recognition of a gain or loss in other comprehensive income at disposal. O recognition of a gain or loss in net income at disposal.
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investments in working capital by a firm:a. Are simply accounting entries and do not afffect NPV b. Do not matter e because cash is recovered at the end of the project c. Reduce a projects cash flow and NPV d. Increase a projects NPV e. Should be ignored in estimating a projects NPV
When measuring the investment of the firm, assets are often used. Select all that are issues with this measurement: Question 2 options: a) The book value of assets declines with use for sales (matching), which makes it appear that the same sales can be made with a smaller investment in assets in the future b) The firm has paid for these assets already (cash flow in the past) c) The market value of assets can vary d) Assets do not represent everything that is needed to make sales
True (t) or False (f) _____ A reason some companies purchase investments is because they generate a significant portion of their earnings from investment income.
M-M theroy with perfect market suggests that divident payment: A.It dependes on the company's capital structure and retained earnings B.Has a positive impact on the value of a firm C.Has a negative impact on the value of a firm D.Has no impact on the value of a firm
When a profitable business has no mandated loan capital but there are non-mandated liabilities a. the return on equity always exceeds the return on total capitalb. the return on equity always equals the return on total capitalc. the return on equity may be equal to the return on total capitald. the return on equity always lags behind the return on total capital choose one
Case Study: Accounting Assets and Liabilities Introduction: In the realm of accounting, understanding and managing assets and liabilities are fundamental for assessing the financial health and stability of an organization. This case study delves into the accounting practices of XYZ Corporation, a manufacturing company, to illustrate the significance of proper asset and liability management. XYZ Corporation's Asset Management: XYZ Corporation, in its commitment to effective asset management, carefully categorizes its assets into current and non-current. Current assets, such as cash, accounts receivable, and inventory, are monitored closely for liquidity and short-term financial health. Non-current assets, including property, plant, and equipment, are assessed for their long-term value and depreciation. Liability Management and Debt Ratio: To ensure a healthy balance between assets and liabilities, XYZ Corporation meticulously manages its liabilities. Current liabilities, like accounts…

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