Due Diligence Homework: Key Issues to Watch For

2) By having to report shipping and handling revenue you receive (from customers) in your top P&L line (as noted above), the calculation you make showing the percent EBITDA your business generates will be smaller — as the divisor (net sales plus shipping revenue) will be larger.

It pains me as a catalog deal maker to note that a consolidator CEO told me recently the result of “lower EBITDA” margins in our industry (which aren’t as well-regarded by financers as they once were) will be seen as another negative impact on catalog valuations.