Watch a brief introduction to the Tariff Impact Calculator, followed by several examples of tariff calculations for private equity deals.
Tariff Calculator assumptions in the Demo:
Average Unit Cost (±% UC): If 25% of the company’s inputs are exposed to an additional 20% tariff, then UC would increase by 20%∙25% = +5.0%.
Average Unit Price (±% UP): The company might respond by increasing UP to offset higher unit costs.
Volume (±% Q): Depending upon the elasticity of demand, increasing prices may reduce Q.
Overhead (±% SG&A): Tariffs should have minimal direct impact on SG&A, but may do so indirectly through unhedged foreign exchange rate fluctuations. If 20% of overhead expenses are in a foreign currency and the base currency weakens by 10%, then SG&A would increase by 10%∙20% = +2.0%.
Market Multiple (±% MM): Prevailing MM values may compress due to increased uncertainty, currency risks, competitive pressures, interest rates, growth concerns, etc.
Company Multiple (±% M): The company’s M value may change more or less than the broader market valuation multiple, depending on relative tariff exposure, adaptability, cost pass-through success, industry context, etc.
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