Investment Banking Interview Question of the Week #04

A company has had positive EBITDA for the past 10 years, but it recently went bankrupt. What are some different ways this could this happen?

keep-calm-and-deliver-the-ebitda-1

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One thought on “Investment Banking Interview Question of the Week #04

  1. This shows that they were able to cover expenses, however a large amount of their remaining earnings were going towards interest payments and/or towards paying taxes. Also if a large amount of their EBITDA was depreciation and amortization it would inflate their actual earnings. These could contribute to lack of cash which would then lead to bankruptcy.

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