|
|
|
|
|
|
by ryana
4465 days ago
|
|
|
"Look.. look at Amazon. That company has never posted a profit. And yet every trader I know is falling over themselves throwing money at them. It's the belief in investing in something"sexy", and "new"." This is a) a lazy narrative that simplifies the realities of Amazon's business models and b) flat out false. The last 4 years Amazon has posted EBITDA of $1.497B, $934M, $544M and $506M (2010-2013, respectively). (1) Over that same time period they've had Net Income of $1.152B, $631M, ($39M), and $274M So yeah, I'd say unequivocally that $3.481B in EBITDA and $2.018B in Net Income over a four year time span is absolutely "posting a profit." 1) https://www.google.com/finance?q=NASDAQ%3AAMZN&fstype=ii&ei=... |
|
|
Also this crap about revenue before taxes, interests - etc (your EBITDA) is just that, crap. It's unreliable because a company can decide what is (and what is not) included in the calculation. Of course, this means that a company can change (and many do) this "measure" from reporting period to reporting period. Remember the Dot-Com bust? Companies that had no value, or any chance of value, looked great on paper due to the EBITDA.
EBITDA does not represent a company's cash. More like it's cash flow that it has to service debt (and as I already said, that calculation can be manipulated by the company). It was designed for this purpose in the 80's - the leverage buy-out decade.
// END of rant
EBITDA doesn't measure profit. Or the ability to earn profit. And frankly, it's a cop-out to state to prove a company's value.