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> EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance I disagree. The acronym is surely a mouthful, but you ca
by airstrike 6y ago
> EBITDA is important and it's a hard concept to understand for those who aren't familiar with finance
I disagree. The acronym is surely a mouthful, but you can summarize EBITDA as "approximately the same as cash flow generated by the company before paying any taxes, interest on loans or making capital investments like building a new plant or buying manufacturing equipment" which should be very intuitive for someone to think through
- klmadfejno 6y agoI don't think that's intuitive at all. If you lack any financial experience, merely looking at cash flow is going to be intimidating.
- airstrike 6y agoThat's why you look at EBITDA and ignore the walk from Net Income to Cash Flow. If you're not looking at statements, all I'm saying is "EBITDA is the cash generated (i.e. the profit) before taxes or interest on loans"
- klmadfejno 6y agoInterest on loans varies wildly by industry though. EBITDA is certainly something on can reach a useful level of understanding on with a bit of effort, but it's hardly intuitive to someone who's never looked at financial statements before.