I'm asked to chose a proxy for CFO between two. Net income as CFO is equity indicator, Net income - accounting result, CFO - cash result. But on the other side EBITDA include D&A, but interest expense, taxes and it's more like a proxy for FCF(F,E).
Which better? Thank you.
| +355 | Evercore Intern Seizure | 54 | 7h |
| +67 | JPM M&A is Gone??? Purely Coverage Banking??? | 31 | 6h |
| +58 | Is DCM actually underrated ? | 24 | 17h |
| +50 | How do I understand vs. just memorizing? | 5 | 16h |
| +48 | Losing my personality in Banking | 9 | 17h |
| +47 | Are all Tech / TMT groups sweaty? | 38 | 13h |
| +42 | Associate & Above IB exits | 16 | 3d |
| +32 | Incoming IB Analyst: Best Ways to Prepare? | 10 | 9h |
| +27 | Which groups are ideal for laterals? | 12 | 11h |
| +24 | The good and bad with Wells Fargo | 1 | 17h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Sort of a weird question because they're both not very good. Gun to my head, id choose net income because its at least a metric that includes leverage (both cfo and NI are equity multiple denominators)
I don't understand, you choose Ni or EBITDA ?
He said net income
/
I'll go for EBITDA (minus tax preferably) because of the D&A. In 75% of businesses D&A is much higher than interest expense. Next to that net income can have all sorts of disturbing items like income from equity investments.
EBITDA is usually a proxy for cash from operations
Thank you. I thought EBITDA is more suitable proxy for FCF, no?
Voluptatem tenetur quo quam eos. Aspernatur doloribus eum nemo fuga. Excepturi consequatur doloremque laboriosam et. Tempore non ut optio ut amet natus. Ut odit repellat dolor dolores omnis corporis. Consequatur quis minima facere commodi ea dicta. Odio consequatur qui omnis libero repudiandae similique sunt.
At dolore nemo aut et iure harum enim. Aut nihil omnis voluptatem fugiat omnis minima. Praesentium fugit porro sunt blanditiis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...