How does one extrapolate EBITDA from payroll?

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May 24, 2021

by a searcher from Miami University of Ohio in Cleveland, OH, USA

I am working on a valuation project and I found PPP data for the company, however I need to extrapolate EBITDA from the PP. I understand that the PPP is 2.5x the average monthly payroll of the business, but after this, what calculation would I have to make, or what information do I need, to find EBITDA from this figure?

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Reply by a searcher
from University of California, Berkeley in Bend, OR, USA
If I understand your question correctly, I don't think payroll alone can help you extrapolate EBITDA. Payroll could be a very low percentage of expenses or very high, just depending on the business.
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Reply by a searcher
from University of Colorado at Boulder in Denver, CO, USA
I would argue you could create a range based on the the general margins for a company and use the employee count to fact check
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