Traded X times the earnings, EBITDA or net income?
When articles say that this company is trading x times the earnings, are they taking about net income or EBITDA?
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Probably EBITDA. That ratio is much more commonly used in valuations.
EBITDA. It is a proxy for free cash flow.
This is wrong. Not Free Cash Flow, but Operating Cash Flow. I'm sure you know your shit but just wanted to correct you.
If you're reading about a public company, they are likely referring to net income.
Difference between CFO and FCF is capex, which you can get a good feel for pretty quickly. I've used it and heard it used in my office and elsewhere both ways. EBITDA is CFO either so both are going to be a "proxy".
EBITDA = hahahaha.
Answer = net income (as in price to earnings which means market cap to net income or price per share to earnings per share)
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