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The most interesting part of this article is the term "Community Adjusted EBITDA". It's not a term invented by the Prof but something used by WeWork. I remember

• dvtrn 7y ago
  Twice this week I’ve heard of EBITDA, the last conversation while taking an outdoor break with a coworker bemoaning some head scratching strategy choices from management where I work. Thanks for the explainer link.
  • csours 7y ago
    EBITDA itself is an interesting number that tells you something about the company in question. It's not the only number you should use, and it can definitely be misleading if it's the only thing you look at, but it does tell you something about the underlying business. However, 'We' has it's own EBITDA-sounding metric where they exclude so many expenses it is laughable.
• csours 7y ago
  > "More than its cash-burning ways, WeWork’s IPO will test investor tolerance for made-up accounting metrics. You might recall “Community Adjusted EBITDA,” the gauge WeWork devised to measure net income before not only interest, taxes, depreciation, and amortization, but also “building- and community-level operating expenses,” a category that includes rent and tenancy expenses, utilities, internet, the salaries of building staff, and the cost of building amenities (which WeWork has described as “our largest category of expenses”)." [0] Hahaha. I think its pretty fair to say that this is not a Generally Accepted Accounting Practice measurement. (non-GAAP) I've only visited a We Work location once, but it really felt like a VC funded startup - particularly the amenities. Without the amenities, it would have been just another depressing office. 0 - https://qz.com/1685919/wework-ipo-community-adjusted-ebitda-and-other-metrics-to-watch-for/ https://qz.com/1685919/wework-ipo-community-adjusted-ebitda-...
  • vmurthy 7y ago
    Imagine if Netflix says it won't expense content :-) . That's one of the hundreds of analogies I have read about this creative accounting practice.