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EBITDA pic display
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atulram committed Jan 27, 2019
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"\n",
"- EBIT is Earnings Before Interest and Tax (it essentially means _operating profit + nonoperating profit_ ).\n",
"- EBITDA is Earnings Before Interest, Tax, Depreciation and Amortization\n",
"![Ebitda](EBITDA.jpg)\n",
"![Ebitda](EBITDA.JPG)\n",
"- The Idea for EBITDA is that Depreciation and Amortization is not essentially the cash which is going out of the door as it is a spread out expense and the cash might have been spent 10 years ago\n",
"- So, D&A is considered a non cash expense and adding it to EBIT gives the raw cash that the enterprise is spitting out.\n",
"- A general rule of thumb is 5 times EBITDA is a good valuation"
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