BVX Knowledge Base
BVX Knowledge Base
M&A University


See Inputs and Balance Sheet for general instructions.

  • Enter the normal level of total inventory required to generate the Final Adj. EBITDA. Inventory includes raw inventory, finished goods inventory, Work-In-Process (WIP), parts inventory, field inventory, etc.
  • Professional help may be required to determine normalized inventory if year-end inventory is influenced by tax/earnings motivations, or if inventory fluctuates due to order size, uneven shipments, seasonality, or if certain inventory has been expensed rather than capitalized, etc. 
  • For the future years, BVX calculates inventory in proportion to sales.  Example: If inventory is 100 in Year-0, and if sales increase by 10% in Year-1, inventory for Year-1 will increase to 110, an increase of 10 from Year-0.   Inventory changes impact cash flow calculations.  Advanced Features allow for manual entry of inventory for the future years.
  • Enter actual inventory. Actual level of inventory required to generate the Final Adj. EBITDA should be entered regardless of the amount recorded on the financial statements. Often inventory on the financial statements is understated. The amount to be entered is the actual inventory required by the business to generate the EBITDA. Non-essential inventory should be excluded if it does not impact EBITDA.
  • BVX does not allow separate inputs for raw material, WIP and finished good inventory.