EBITDA Adjustments in a Transaction Services Interview
How to handle EBITDA adjustments in a Transaction Services interview: types, hierarchy, examples and what Big 4 recruiters really want to hear.
EBITDA adjustments are the technical heart of any Transaction Services interview. Whether you're interviewing at EY, PwC, KPMG, Deloitte or a boutique advisory firm, you will be asked about them. The question is whether you answer like someone who has read a textbook or someone who has actually sat in a data room.
Why EBITDA adjustments matter in M&A
When a buyer acquires a company at an 8x EBITDA multiple, a EUR 500k adjustment in the EBITDA figure translates directly into a EUR 4m swing in the purchase price. The FDD team's job is to get this number right — and to understand which adjustments are defensible and which are speculative.
This is the framing you should bring to every interview answer on the topic.
The four types of EBITDA adjustments
A well-structured answer always presents a hierarchy:
1. One-off items — Non-recurring charges or income that will not repeat. These are the easiest to defend because they have documentary evidence behind them. Examples: M&A transaction fees, one-time litigation settlement, severance for a key departure.
2. Presentation adjustments — Items correctly recorded but misclassified (e.g., costs that should have been expensed but were capitalised). These often require a deeper understanding of the company's accounting policies.
3. Run-rate adjustments — Annualisation of partial-year events. If a price increase took effect on 1 July, only 6 months are captured in the annual accounts. A run-rate adjustment captures the full 12-month impact.
4. Pro-forma adjustments — The most complex and most contested. These reflect structural changes not yet visible in the historical accounts (acquisitions, site openings, new contracts). They require supporting assumptions and are scrutinised heavily by buyers.
How to present this in an interview
The bridge structure is key:
Reported EBITDA → ± one-off items → ± presentation adjustments → ± run-rate adjustments → ± pro-forma adjustments → Normalised EBITDA
Each line in the bridge must be justified and sourced. The further you are from verifiable historical data, the more the adjustment will be discounted by a buyer.
What recruiters test for
The typical follow-up questions:
- "If management proposes a EUR 600k add-back for restructuring costs, how do you respond?"
- "What's the difference between a run-rate and a pro-forma adjustment?"
- "Give me five examples of EBITDA adjustments you might encounter in a deal."
A weak candidate lists adjustments mechanically. A strong candidate explains the economic logic behind each one and flags where the risk lies.
The case studies in this programme cover over 150 EBITDA adjustments drawn from real transaction situations — the best way to build the fluency that makes the difference in an interview.