EBITDA Flashcards
Why is EBITDA used?
To measure corporate profitability
To measure corporate profitability
Why is EBITDA used?
When can EBITDA be used as a shortcut?
Estimate the cash flow available to pay the debt of long-term assets
Estimate the cash flow available to pay the debt of long-term assets
When can EBITDA be used as a shortcut?
What does EBITDA stand for?
Net income + Interest + Taxes + Depreciation + Amortizaton
Operating Profit + Depreciation Expense + Amortisation Expense
Net income + Interest + Taxes + Depreciation + Amortizaton
Operating Profit + Depreciation Expense + Amortisation Expense
What does EBITDA stand for?
What does EBITDA ignore?
Ignore costs of assets and working capital
Ignore costs of assets and working capital
What does EBITDA ignore?
Why is operating cash flow a better measure of how much cash a company is generating?
As it adds non-cash charges back to net income
As it adds non-cash charges back to net income
Why is operating cash flow a better measure of how much cash a company is generating?
Best way to compare a company’s EBITDA?
Compare different companies in the same sector. The higher the EBITDA, the better
Compare different companies in the same sector. The higher the EBITDA, the better
Best way to compare a company’s EBITDA?
