PRIVATE EQUITY / INTERACTIVE ENVIRONMENT
Alderbridge Packaging
Reconcile the EBITDA bridge before drafting an investment-committee screening memo.
WHAT YOU’RE LOOKING AT
One environment. Your answer.
A fictional packaging business reports $12M EBITDA. A $2M plant-relocation expense is already added back in management’s $14M adjusted figure, then appears again in a separate schedule.
Read the evidence and make your choices. The grader checks your numbers, the trap, and your decision. Edit and grade again.
The data room4 documents · Read the excerpts before you decide
Management CIMCIM p. 8
Reported EBITDA is $12M. Management adjusted EBITDA is $14M, including a $2M relocation add-back with cost identifier MOVE-07.
Back to correction ↓Quality-of-earnings scheduleQoE adjustment schedule row 6
Relocation expense MOVE-07 totals $2M. The separate adjustment schedule restates the same expense; it is not an additional cost.
Back to correction ↓Draft LBO assumptionsLBO assumptions tab B4–B5
The screening model assumes $70M of entry debt. The analyst has linked $14M management EBITDA and added the QoE schedule again.
Back to correction ↓Screening instructionsIC screening policy §1
Count each underlying expense once. For this exercise, screening leverage must not exceed 5.0× supported EBITDA.
Back to correction ↓Available tools in the scripted example4 tools
read_documentInspect the CIM and QoE adjustment schedules.trace_adjustmentMatch an adjustment to its underlying cost identifier.calculateReconcile the EBITDA bridge.submit_ic_screenSubmit supported EBITDA and screening leverage.
Try the task.
The interactive task is loading. You can also follow the scripted example below.
THE SCRIPTED EXAMPLE
Follow the same task, step by step.
See a plausible mistake, the correction, and the reasoning behind each check.
AGENT ATTEMPT
Follow the attempt.
Scripted calls. Highlighted: the missed trap.
read_documentManagement adjusted EBITDA: $14M.
Tool arguments
{"document":"cim","page":8}calculateMissed trapEBITDA $16M; $70M / $16M = 4.375×.
Tool arguments
{"management_ebitda_m":14,"qoe_addback_m":2}submit_ic_screenThe same MOVE-07 expense has been added twice.
Tool arguments
{"supported_ebitda_m":16,"screening_leverage":4.375}
Use $16M EBITDA and 4.375× leverage. The transaction clears the 5.0× screening limit.
SENIOR CORRECTION
What changes, and why.
Authored illustration; no actual expert review.
Use $16M EBITDA and 4.375× leverage. The transaction clears the 5.0× screening limit.
Use $14M EBITDA: $12M reported plus the single $2M MOVE-07 expense. $70M / $14M = 5.0×, exactly at the exercise limit.
The correction
An adjustment schedule is not automatically incremental. The shared cost identifier proves that both entries describe the same expense.
Exact evidence
$14M, including a $2M relocation add-back with cost identifier MOVE-07.
CIM p. 8The separate adjustment schedule restates the same expense; it is not an additional cost.
QoE adjustment schedule row 6
GRADING
Same checks. Better answer.
The same exercise grader scores the starting answer and reference correction below. Try your own answer to compare.
| What is checked | Agent attempt | After correction |
|---|---|---|
01Numbers right? | 1 / 2 checks pass $12M reported EBITDA + one $2M MOVE-07 cost = $14M supported EBITDA. | 2 / 2 checks pass $12M reported EBITDA + one $2M MOVE-07 cost = $14M supported EBITDA. |
02Traps caught? | 0 / 2 checks pass MOVE-07 is already in management EBITDA; the QoE schedule is not incremental. | 2 / 2 checks pass MOVE-07 is already in management EBITDA; the QoE schedule is not incremental. |
03Sound decision? | 0 / 1 checks pass Supported leverage is 5.0×, exactly at the exercise limit; there is no headroom. | 1 / 1 checks pass Supported leverage is 5.0×, exactly at the exercise limit; there is no headroom. |
Fictional, authored environment. Your submission is scored by a deterministic exercise grader; the walkthrough shows a scripted example.
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