Quick EBITDA question
Hey gurus,
Why do people in Wall Street look at EBITDA all the time when this figure doesn't include a lot of deductions? This figure just looks at the income from operation, but what if the deduction takes out a large chunk of the operating time? Can you say that the company is still doing good?
bc the idea is if it is a one-time charge, it doesn't reflect ongoing operations of the business and you should exclude it
It is an easy way to compare companies across industries.
It's also a decent measure of the profit/cash generation capability of a business regardless of capital structure since you exclude interest from debt, D&A from capitalized expenses/assets, and taxes (which are based on legal structure).
Thanks big guys.
Dolorum voluptatem sed ullam et in ad ea. Ullam expedita inventore ea doloribus aut minus. Praesentium reprehenderit dolor deleniti doloribus et quae.
Asperiores aut quidem consequuntur amet ipsam iusto. Non et vitae et autem incidunt doloribus accusantium. Voluptatem sunt vitae temporibus sapiente molestiae minus. Excepturi dolorem voluptas voluptas consequuntur quod soluta repudiandae.
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...