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EBIDTA certainly has merits and drawbacks – like any other metric – for measuring the health of a company. https://www.investopedia.com/terms/e/ebitda-margin.as
by kornish 9y ago
EBIDTA certainly has merits and drawbacks – like any other metric – for measuring the health of a company. https://www.investopedia.com/terms/e/ebitda-margin.asp https://www.investopedia.com/terms/e/ebitda-margin.asp
- JumpCrisscross 9y agoEBITDA is a good un-levered metric because it approximates cash flow. For a ten-year old company going public, actual cash flow and net income are more important. If Dropbox are trying to price at a premium to Box and don't even have profits, they're going to look like Snap and Twitter more than anything respectable.
- philjr 9y agoKinda. It approximates cash flows for some types of companies. For others it doesn’t. Hard to generalize here. Ultimately the best measure of cashflow is cashflow. It’s a good normalized measure of a stable mature business, but it can overstate or understate the health of depending on the revenue and billings model. So, basically, YMMV
- redwood 9y agoBit of a trick: build your own cloud and turn opex into depreciation on capital investment = become "profitable"
- user5994461 9y agoAnd hide the $600M of debt you just took.