EBITDA? I'm not going to claim it's perfect (and if the company is struggling and paying back loans it's going to ignore the interest charges), but the idea beh

EBITDA? I'm not going to claim it's perfect (and if the company is struggling and paying back loans it's going to ignore the interest charges), but the idea behind it AIUI is that you strip out some of the, perhaps, "creative accounting" (that is mostly there to reduce a corporation tax bill) and deductions and focus on earnings/cost-of-sales. Which, should, in theory relate to how much a company can afford to pay for ancillary services. In the industry I work in, between 96%-97%+ of revenue is the cost of the sale and is immediately handed over. Many purchases don't make a profit at all (fixed costs, commission doesn't cover them so it's loss-making - but you need to be able to offer them anyway).