Revenues 2 3 4 LOGS 500 515 536 Gross Profit 300 306 314 SG amp;A 200 209 222 100 102 104 Operating Income 100 107 118 Depreciation 30 30 30 EBITDA...
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Revenues234LOGS500515536Gross Profit300306314SG &A200209222100102104Operating Income100107118Depreciation303030EBITDA130137148Debt300300Notes :( 1 ) revenue growth in years 2 and 3 is all volume driven( 2 ) COGS in year 1 is 67% variable1 . In the above example ( which is the same historical informationas the previous problem ) assume the biggest risk to thiscompany is customer concentration . Assume onecustomer accounts for 25% of sales . Assume the companyloses this customer . Project revenue , COGS and EBITDAin year 4 . Calculate Debt / EBITDA and interest coverage inyear 4 .2 . Now assume the largest risk to this customer is rising costs thatcannot be passed along to the customers . Specifically , assume that the variablecomponent of COGS rises in price by 30% in year 4 . Project revenue , COGSand EBITDA in year 4 . Calculate Debt / EBITDA and interest coverage in year 4 .
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