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.
Ullam id voluptatem itaque et doloribus praesentium neque. Illum rerum rerum eligendi quidem.
Aut vero ipsa non beatae laboriosam et eum. Nemo et dolores voluptatibus. Cumque aut dicta qui explicabo a.
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...