hi all. can someone please explain intuitively what cash burn means? and what this means in relation to ebitda? if a company is burning cash, does that mean there is no ebitda? for example, how would one interpret "10M cash burn" ?
thanks so much...
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also if someone could also address a scenario if the company is generating revenue vs. not generating revenue... thanks
Cash burn means total inflows total outflows.
Intuitively your cash burn would be your EBITDA minus Capex minus WC requirement.
assuming debt free. to the extent levered principal and interest payments (and possibly even taxes) contribute to cash burn.
That's right. You also need to subtract debt servicing and taxes paid
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