Help calculating inventory financing costs · Buy, Build, Sell ™ Businesses

Help calculating inventory financing costs

Hey all! I'm doing some DD on a potential target. It has been generating between €400k-€1m in EBITDA for the past 5 years. The question I have is that how would you calculate the cost of financing equipment? The company basically sells products, their revenue is around €4m, but they haven't used financing before, they've bought all their inventory in cash (around €2m in inventory year round). How would you calculate how this impacts the returns and cashflow? Thanks and have a great one!

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