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by airstrike 1936 days 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
1 comments
klmadfejno 1936 days ago
I don't think that's intuitive at all. If you lack any financial experience, merely looking at cash flow is going to be intimidating.
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airstrike 1936 days ago
That'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"

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klmadfejno 1935 days ago
Interest 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.
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