EBITDA = Executive Bullshit Intended To Distract Attention

November 07, 2021
by a searcher in Los Angeles, CA, USA
Ebitda is a proxy to cash flow, a lot of people think EBITDA is valuing a business. No; valuing a business comes after than EBITDA.
Another metric paired with EBITDA is Multiples, which does not account for cash flow thus leading to overvaluations.
from Wesleyan University in Granville, OH, USA
For typical searchfund targets I believe the most relevant question is, 'What's it worth to me and my investors?' What does the buyer think they can do with it - improve operations, grow market share, expand into adjacencies? I believe the value to a searchfunder is as much in real options as in the current business. However, in the early screening, I'd ask for summary financials and among the metrics I want to see in the I/S are EBIT and/or EBITDA.
from Indian Institute of Technology, Madras in Austin, TX, USA