Who should answer this question? Someone VERY comfortable with finance
and accounting.

8 finance questions

1) When we have a Carveout situation (carving a 'sub' from a parent
co.) what are the expenses that you put back to the 'sub' and what
expenses is the 'sub' relieved from. Show me an example of a company
selling a sub (carveout). Show me the income statement of the sub pre
and post spin-off. Show me what the effect on EBIT is given each of
the Benefits or Expenses that the SUB will bear.(Increase vs Decrease)

For example: PARENT Co. "A" carves out a sub. (call it "B")- some of
the expenses that co. B does not have to pay anymore are Management
fees to parent. Overhead. Some G&A...etc. (I need a detailed list {all
you can think of} of these possible cost savings line items and
possible cost increasing items as well) plus tell me about the tax
treatment that accompanies each line item.

I saw a model that has: Allowable and unallowable HOE (home office
expenses) added back to EBIT of company B. What is allowable and not
allowable? what is HOE and how is it allocated. Other than HOE, I saw
items such as "stock", "management fees" ..etc.

2) Seperate question
EBIT vs EBITDA

a) Is EBIT formula = Sales - COGS - Operating costs - Depreciation ?
I saw a model that shows EBIT as = Sales COGS-R&D-SG&A

Are both formulas correct because depreciation is typically burried in
COGS, or in the Operating expenses?

3) Both Amortization & Depreciation give a company a tax advantage or
only Depreciation ?

4) How do you calculate Free Cash Flow (in detail and please make it
in steps and easy to understand maybe with examples) - Why do you
subtract the increase in working capital? is it because an increase in
Receivables or Inventories means a decrease in cash automatically? How
about when the increase in working capital is purely an increase in
cash (not receivables or other current asset)

5) Walk me (in painful detail) thru a DCF calculation and try to make
it easy (I know..it's like telling a dentist, don't hurt me please)

6) What does an LBO fund look for in an investment (please include in
your discussion IRR, exit multiple, leverage)

7) what are typical leverage ratios for companies? 
how much debt can a company sustain given a certain cash flow
(discuss Debt/Equity, Total Debt/EBIT multiple , EBITDA/Interest expense)
What is considered (by wall street) highly levered, what is considered
lean and could take on more debt. Please discuss in terms of ratios

8) When do bankers use EBIT and when do they use EBITDA? and when do
they use Free cash flow. (note: EBITDA is not = FCF)