Our next job is to fill in the blanks in the segments.

You might recall that when we did the segments, we got to EBIT and we did a lot of work to understand individual segments and what drives their forecasts.

We were not able to get EBITDA and that's because we were going to take EBITDA with reference to the main model, which wasn't done at that point.

Our first job is to grab total depreciation and amortization from the main model.

We'll be able to find that from the relevant base calculations.

So you can see that total depreciation amortization in year one IE 2021 with 3 51, and we can now copy that to the right because the years match over the two tabs.

And so we have our total depreciation.

What we can do now is relate historically how that total depreciation made its way to segmental depreciation and amortization.

And you can see that we found perhaps from segmental reporting that 148 of the 3 5 1 made its way to this segment, which represents about 42%.

That has gone up and down, and we've decided to hold it steady at 40.8.

So you can see that paint is getting a lower proportion.

Perhaps this is a different profile of machine, perhaps it's size based or a number of factors, all clouding the same outcome.

What we can do there is we can now on a forward basis, say 40.8 of the overall depreciation will come this way.

We can then take our EBITDA and add in the amortization and depreciation, and then we can finally create an EBITDA margin by dividing by the overall revenue.

And you can see that the EBITDA margin is substantially higher than the EBIT margin because of the depreciation and amortization.

This would be a good point for you to pause the video and have a go at the second segment yourself and then unpause to see the results.

Here are the results. Now you're probably looking at the same calculations because if you did it exactly the same as the first segment, that's what you would've done.

And so you would've multiplied the percentage by the total DNA to get the segmental DNA.

At this point, if you are very on the ball, you might be looking at it and saying, hold on, where's the rest? Because we've just allocated about 40% to the first segment paints, and then about 47 to the second segment performance, and that has left a substantial amount of depreciation amortization left, and that is going to go to corporate.

We can copy in the total depreciation and amortization, and you can see here that we have the total charge to the segment.

And what's clever here is that it's one I a hundred percent minus the charging for the other two. And What that will do is ensure that no depreciation is missed, which would cause strange mismatches between the two tabs.

We can use that then to predict the depreciation for headquarters, so corporate, and then we can use that to create the ebitda.

And having done that, we can now find the total ebitda and that allows us to fill in another blank this time on the main model, which is the total EBITDA going forwards.

We've now built the operating model and we're ready to look at the metrics.