Is "cost of equipment finance" a legitimate add back to get to EBITDA?

October 02, 2024
by a searcher from Narsee Monjee Institute of Management Studies in Toronto, ON, Canada
Evaluating a deal for a Niche Logistics Company with $5M Revenue and $1.2M Adj. EBITDA. The business has a lot of assets ($3M+) in trucks and trailers-about $1M in pending loan. In the P&L Summary, there is a substantial add back tied to "Cost of Equipment Financing" and the footnote reads- Cost of financing included in ""Rental " expenses have been added back to reflect profitability if units owned free and clear." Is this a legitimate add back?
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
from The University of Chicago in Chicago, IL, USA