What is EBT Cash for?
The EBITDA: How to calculate this metric
The EBITDA key figure can play a role both in the management of a company and in its evaluation by external organizations. It provides information about the profitability of company activities, which is why it is also used to assess the creditworthiness of companies. Some companies even use the metric to measure manager salaries. The value gives a good impression of the profitability of the company's activities and disregards those items that have nothing to do with it. These include:
- Interest costs and income: Interest on loans and income from investments depend on a company's financial strategy and are not directly related to its activities.
- Taxes: The taxes due depend on many different, often external factors and say nothing about the profitability of company processes.
- Depreciation: Depreciation on property, plant and equipment and on intangible goods results from the investments that a company wants or has to undertake. Therefore they have no meaningfulness when it comes to the pure company processes.
The EBITDA is therefore an indication of the operational constitution of a business. Since depreciation is excluded, the key figure does not provide any information about the success of a company as a whole. Of course, a company's expenses also include its depreciation. On the one hand, its assets are constantly losing value and have to be replaced; on the other hand, every company must also invest in order to react to changes in its economic environment or to achieve its growth goals.
- Know all the good shopping apps
- What started an increase in climate change
- Are INTPs really just sociopaths
- What is considered our mother tongue
- What does cheap work mean
- How to start a payment gateway
- How programmers earn 200,000 salaries
- Which glasses contact prescription represents legal blindness
- What is the job scenario in India
- What's your mother's favorite dish
- What is acacia wood
- The traffic in Bangalore is the worst in India
- What's rich in Britain
- Why do some people end up alone
- Which sura contains all the names of the prophets?
- What is e-book reading
- Why do escalators not have start buttons
- How can I save money for the future
- How can I get calm inside
- What makes things easy or difficult
- How long does food poisoning last
- Can I start dancing when I am 15?
- How do I lie without getting caught
- How can teenage girls attract boys
- What is a treatment for white discharge
- What attracts African women to white men
- What Makes a Teenager Mature
- How can I produce creative ideas
- Is chartered accountancy a good job
- How would the unrest in Hong Kong benefit America?
- Is Germany the leader of the EU
- How do Romanians like Spaniards
- What is staff training