Adj. EBITDA Includes HR Expenses & Property, Marketing & Admin. Expenses
A casino operator that I am looking at includes Adj. EBITDA in their financial reports calculating in the following way: Adj. EBITDA = Revenues - Human Resource Expenses - Property, Marketing & Admin Expenses
Their P&L Looks like this: Revenue Total Expenses: Human Resources Property, Marketing, and Admin Share of Profit of Equity Investment Amortization SBC Impairment / Reversal of Long-Lived Assets Impairment of Goodwill Interest & Financing Costs, Net Litigation Settlement Restructuring and Other Gain On Land FX Loss / Gain EBIT ....
Can someone explain to me why these adjustments are being made to EBITDA? Shouldn't HR + Property, Marketing & Admin expenses be considered as normal operating expenses and therefore be included in EBITDA rather than Adj. EBITDA? Where Adj. EBITDA would include expenses like impairment, litigation settlement, restructuring...?
Rather than providing the answer, will provide a suggestion -
Try to get to Adjusted EBITDA starting from revenue. Then also try to get to Adjusted EBITDA starting from Net Income. Answer should become apparent, and no the answer isn't "the company doesn't know what Adjusted EBITDA is".
Thanks, for the suggestion - I found my answer and will be using this approach for now on.
The format or classification of operating expenses on the P&L threw me off... The expenses below Property, Marketing, and Admin are the one-time expenses and SG&A is really just Human Resources + Property, Marketing, and Admin.
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