Adjusted EBITDA Example: WeWork Community Adjusted EBITDA
Adjusted EBITDA is a very common metric that can be found in many investor presentations, which makes understanding EBITDA and acceptable adjustments to this figure important. Unfortunately EBITDA is frequently used as a proxy for cash flow. As this video will demonstrate, it is anything but. In businesses that require heavy capital expenditures or those with heavy debt burdens, the discrepancy between EBITDA and cash is vast. Add to this the adjustments investment bankers and management teams will use to embellish or even exaggerate earnings and the metric can become meaningless. As the saying goes, “You Can’t Eat EBITDA.”
In the context of debt service, EBITDA can be helpful because adding back interest expense, taxes and non-cash charges including depreciation and amortization, provides a quick back of the envelop approach to evaluating how much interest expense a company can tolerate. But, it has become pretty common for this metric to include additional adjustments when there’s an attempt to raise capital or sell shares to make the company look even more profitable than it is. WeWork arguably pushed the envelope on an otherwise common attempt to inflate earnings with words vs. dollars.
Part 1: https://youtu.be/fo0Q7K8JLtU
Part 2: https://youtu.be/Av2vyG_ZHmo
Part 3: https://youtu.be/Dbx4tf4RKQ0
Part 4: https://youtu.be/2xBCLTn51ro (this video)
Видео Adjusted EBITDA Example: WeWork Community Adjusted EBITDA канала A Simple Model
In the context of debt service, EBITDA can be helpful because adding back interest expense, taxes and non-cash charges including depreciation and amortization, provides a quick back of the envelop approach to evaluating how much interest expense a company can tolerate. But, it has become pretty common for this metric to include additional adjustments when there’s an attempt to raise capital or sell shares to make the company look even more profitable than it is. WeWork arguably pushed the envelope on an otherwise common attempt to inflate earnings with words vs. dollars.
Part 1: https://youtu.be/fo0Q7K8JLtU
Part 2: https://youtu.be/Av2vyG_ZHmo
Part 3: https://youtu.be/Dbx4tf4RKQ0
Part 4: https://youtu.be/2xBCLTn51ro (this video)
Видео Adjusted EBITDA Example: WeWork Community Adjusted EBITDA канала A Simple Model
Показать
Комментарии отсутствуют
Информация о видео
Другие видео канала
Earnings vs Cash FlowCan An AI Design Our Tax Policy? 💰📊What is Adjusted EBITDA?? (Transaction Services and FDD)How to Get a Job in Private EquityWeWork - The $47 Billion DisasterECN4514: Product Differentiation in Food & Beverages Industry (Monopolistic Competition)Pricing Strategy and Heuristics: How Humans Respond to Expensive GoodsTim Bennett Explains: What is EBITDA?Why you should think about financial independence and mini-retirements | Lacey Filipich | TEDxUWAReturn Last Non-Empty Cell in a Row or Column in ExcelHow the Cash Flow Statement Balances a Three-Statement ModelInvesting Mistakes - Why Beginners Lose Money in the Stock MarketWhy the Cash Flow Statement Is So Important (Part I)Building a Business Development Role in Private CreditLBO Returns Analysis: Measuring IRR and MOICHow Working Remotely Will Change More Than WorkThe Spectacular Rise and Fall of WeWorkWhy we analyse EBITDAPrivate Equity Industry Due DiligenceThe Most Deadly Job in America -- And What Happens Next