Wednesday, June 12, 2013

Another FAQ: What are appropriate “add-backs” to Broadcast Cash Flow?

Q:  "What are appropriate “add-backs” to BCF?"


A:  Interest, depreciation, amortization, and taxes should be added back to operating profit to determine BCF.

Buyers and sellers often differ on what additional expenses may be added back to BCF. Usually they are:
1) one-time-only expenses not normally seen in the ordinary course, and

2) owner-related charges which a new buyer would not expect to incur.

George
Media Services Group